Scheme for Interest Subvention to Nano Household Enterprises helps small household and nano business units in Kerala reduce the interest cost on their term loans. The scheme gives interest subvention of 6% per annum for three years on a reimbursement basis, and the rate goes up to 8% per annum for women and SC/ST entrepreneurs.
Applications are open for manufacturing, service, and job-work units with a fixed capital investment of up to ₹10 lakh. Units can apply online through the official portal of the Directorate of Industries and Commerce, Government of Kerala, or in person at the Taluk Industries Office.
Scheme for Interest Subvention to Nano Household Enterprises - Introduction
Scheme for Interest Subvention to Nano Household Enterprises was started by the Kerala government to promote nano and household businesses across the state. Support is given as interest subvention on the term loan taken by the unit, and it is paid back to the unit on a reimbursement basis. Units doing manufacturing, services, or job work can apply under this scheme.
This scheme mainly focuses on units with a capital investment of ₹10 lakh or less for manufacturing or service activities that involve physical value addition using machinery. By reducing the interest burden, the scheme helps a new unit build a strong base during its first three years of business.
Key Information
| Detail | Information |
|---|---|
| Scheme Name | Scheme for Interest Subvention to Nano Household Enterprises |
| Level | State |
| Beneficiary State | Kerala |
| Category | Business and Entrepreneurship |
| Eligible People | Business Entity |
| Benefit Type | Cash |
| Main Department | Industries and Commerce Department |
| Department Running the Scheme | Directorate of Industries and Commerce, Government of Kerala |
Objectives
This scheme works toward a few clear goals for household and nano units in Kerala. Each objective is made to keep small businesses stable and give local families a regular income.
- Generate new employment opportunities in households through self-employment projects.
- Bring household units together so that the potential for local employment increases.
- Make sure of continuous income and improve the wage earning capacity of the unit.
- Address specific business problems that are not covered by other government schemes.
- Give interest subvention on term loans for three years, with support in the first year even if repayment is pending, and in the second and third years when the loan is not an NPA.
- Monitor the business so that financial health issues can be found and fixed early.
Indicative List of Service Activities
This list is not complete. If the service activity involves physical value addition, the District Level Committee can recommend the project for eligibility under the scheme.
- Processing, preserving, and packaging of meat and fish.
- Processing and preserving of fruits and vegetables.
- Embroidery work and ornamental trimmings.
- Metal-working and repair of fabricated metal products.
- Repair of electronics like computers, mobile phones, TVs, and household equipment.
- Electrical welding and soldering.
- Laundry and dry cleaning services.
- Photo copying.
- Motor vehicle repair and alteration.
- Tyre re-treading.
- Upholstery work.
- Repair of boat or vessel structures, pipes, and metal tanks.
- Machinery, engine, and pump repair.
- Waste treatment and disposal.
- Recycling and workshops.
Negative List
Some businesses cannot apply under this scheme. These include photo studios and colour processing centres, breweries and distilleries, sawmills, soap grade sodium silicate, and asbestos processing units unless the asbestos content used is below 25% and the unit meets environmental and occupational health rules.
Other exclusions are metal crushers, steel re-rolling mills, iron ingot manufacturing, calcium carbide, cement manufacturing except units making cement from fly ash, potassium chlorate, cashew industrial units, and power intensive units that need more than 5000 KVA of contract load.
Benefits
Eligible units get interest subvention on their term loan for three years on a reimbursement basis. The exact rate depends on the category of the entrepreneur.
1. A unit gets interest subvention of 6% per annum on the term loan for three years.
2. Women and SC/ST entrepreneurs get a higher rate of 8% per annum for three years.
3. The support covers the combined investment in plant and machinery and other fixed assets including essential office equipment. Cost of land and building is not included in the fixed capital investment calculation.
Important: If the unit defaults on loan repayment at the end of the first year, the subvention is not released. The same rule applies for the second and third years.
Eligibility
A unit can apply under this scheme only when it meets all the conditions given below.
1. Fixed capital investment must be ₹10 lakh or less.
2. The unit must be engaged in manufacturing, services, or job work.
3. The unit must fall under the white or green category as per pollution control norms.
4. The connected power load must be 5 HP or less.
Obligations for Applicants
Applicants have to follow a few rules while applying and after applying under the scheme.
1. Provide accurate information and declare all details truthfully.
2. Provide any clarification or extra documents asked by the authorities.
3. Allow inspection or verification of plant, machinery, and other assets whenever required.
4. Present original documents for verification when the approving authority asks for them.
Exclusions
A unit cannot apply under this scheme in the following cases.
1. The manufacturing unit already claims support under the Entrepreneur Support Scheme or any other State or Central government scheme.
2. The unit already gets a special low interest rate from other government agencies.
Application Process
Applications can be submitted online through the official portal or offline at the Taluk Industries Office. There is no application fee for this scheme.
Online
STEP 1 - Visit the official application portal of the Directorate of Industries and Commerce, Kerala.
STEP 2 - Select Scheme for Interest Subvention to Nano Household Enterprises from the services list and click on Apply Now. New users need to complete registration, while existing users can log in directly.
STEP 3 - After logging in, select New Application and click Proceed.
STEP 4 - Fill in the application form with the required details and submit it.
Offline
STEP 1 - Download the application form from the official scheme page (Annexure 1).
STEP 2 - Submit the filled form with the required documents to the Assistant District Industries Officer at the local Taluk Industries Office or DIC.
STEP 3 - The authorities review the documents and may ask for more clarifications if needed.
STEP 4 - The application is processed and the outcome is shared by the end of the quarter.
Documents
Keep the following documents ready before applying under this scheme.
- Copy of identity proof.
- Bank statement file.
- Statement about the loan amount from the bank.
- Signed declaration of the promoter.
- Annexure II: Recommendation from the financial institution.
- Any additional document asked by the approving authority.
References
FAQ's
What is the aim of Scheme for Interest Subvention to Nano Household Enterprises?
The scheme gives financial support to nano and household enterprises in Kerala by providing interest subvention on term loans on a reimbursement basis.
What are the objectives of the scheme?
The scheme creates self-employment in households, improves wage earning capacity for unorganized units, brings small units together for better viability, and supports businesses with capital investment up to ₹10 lakh.
Which department runs this scheme?
The Directorate of Industries and Commerce, Government of Kerala, runs this scheme.
Which enterprises are eligible?
Units with fixed capital investment of ₹10 lakh or less, engaged in manufacturing, service, or job work, falling under white or green pollution categories, and having a power load of 5 HP or less are eligible.
What is the benefit provided?
Eligible units get interest subvention of 6% per annum for three years. Women and SC/ST entrepreneurs get 8% per annum.
Is there a penalty for loan default?
Yes. If the unit defaults on repayment at the end of the first year, the subvention is not released. The same applies for later years.
What if a unit already gets interest benefits from another government agency?
Units that already get a special low interest rate from other government agencies are not eligible for further interest subvention under this scheme.
How to apply?
Apply online through the official government portal or submit the physical form at the local Taluk Industries Office.