Enterprise Loan Scheme (ELS)
Individuals, artisans, small entrepreneurs, groups of individuals, associations (formal and informal), proprietary/partnership firms, co-operative societies, registered institutions/ trusts, NGOs/voluntary agencies, private and public limited companies, etc, financed by the above eligible institutions.
- To set up new units as well as for modernisation/ renovation/ expansion/diversification of existing units and also for replacement of old and obsolete machinery even if the units were not initially financed by the banks and refinanced by NABARD.
- To change over to new process of manufacturing/introduction of new technology/ computerisation, etc.
- For acquisition of new machinery and equipments resulting in additional production capacity and/or improving productivity or introducing new product/product line, etc.
- For Expansion/Diversification, any unit which has been in existence for at least two years will be eligible.
All manufacturing, processing, marketing and approved service activities in the SSI sector with emphasis on Cottage, Village, Tiny Industries, Rural Artisans and Rural Crafts.
All activities in rural areas or benefiting rural areas that are income generating and/or employment generating, including all service sector activities, are eligible activities under NFS for refinance assistance. For example :
- Educational Services (Educational institutions such as schools, colleges set up privately and Educational loans to students).
- Health services (Hospitals/ Clinics, Health Care Units (both human & animal) set up in rural areas, mobile hospital vans with necessary equipment, para health services, etc).
- Construction sector (e.g. Building Material Supply Bank) .
- Tourism sector ( Theatres, Eco-Tourism, Fair/Exhibition Complex, Hotels, Motels, Shops/ marketing outlets etc for rural products).
- Vehicles (Two wheeler/ three wheelers and four wheelers other than those covered under SRWTO scheme).
- Information Technology ( All activities providing information technology to the rural people).
- Infrastructure (Rural Industrial Estates, Growth Centres, Communication Networks, Rural Safe Drinking Water,etc).
- For block and/or working capital requirements of tiny/SSI/Service sector units.
- In respect of cottage and village industries, artisans, etc, a component for consumption credit could be built-in in the Working Capital component keeping in view the value of the family labour engaged in the production activity.
- If a unit avails Working Capital alone, the ceiling for refinance limit per unit shall be limited to Rs 10 lakh.
Block capital will include the following:
Cost of land (to the extent of borrowers' down payment), workshed, plant and machinery, equipment and tools, computers, technology upgradation, project formulation and consultancy charges, preliminary and pre-operative expenses, etc. and working capital for one operating cycle.
While sanctioning loans, banks may carefully work out the credit requirements of the borrowers both for term loan and working capital. The quantum of working capital component may be assessed taking into account the incremental requirement also for a reasonable period within which the unit is expected to stabilise. Also, wherever the loan includes both term loan and working capital components, while drawing up the repayment schedule, it may be ensured that, as far as possible, the working capital component of the loan is recovered after the block capital component is repaid, so that the unit will have adequate funds for meeting the working capital requirements.
Repayment period of loan
The repayment period should be fixed between 2 years and 10 years with a need based moratorium of upto 18 months for individual cases, based on the debt servicing capacity of the borrower and taking into account the nature of activity to be financed, operating cycle, cash flow and the borrower’s sustenance needs.