Venture Capital Fund for Schedules Caste
Venture Capital is a form of risk capital, that is invested in a business when there is a substantial element of risk relating to the future creation of profits & cash flow. Risk capital is invested as shares (equity) rather than as a loan. As a shareholder, the venture capital return is dependant on growth and profitability of the business.
In order to promote entrepreneurship among Scheduled Caste and to provide concessional finance to them The Finance Minister in his interim budget speech for F Y 2014-15 announced setting up of Venture capital fund for Scheduled Caste with the help of IFCI & Government has provided as an initial capital of Rs. 200 Crores for this purpose.
The objective of the scheme
1) Promote the entrepreneurship amongst Scheduled Caste who are oriented towards innovation & growth of Technologies.
2) To provide concessional finance to the S C entrepreneurs who will create Wealth & value for society and @ the same time will promote profitable business.
3) To increase financial inclusion for SC entrepreneurs and to motivate them for further growth of SC communities.
4) To develop SC entrepreneurship economically
5) To enhance direct and indirect employment generation for the SC population in India
Eligibility criteria
1) Companies having at least 60% stakeholding by Scheduled Caste entrepreneurs for the past 12 Months with Managerial Control.
2) While selecting the SC entrepreneurs, women SC entrepreneurs would be preferred.
3) The companies applying assistance for more than Rs. 5.0 Crore shall preferably get their project appraised by banks/ FIS
Scheme details
1) Tennur of Financial Assistance – 6 yrs
2) Investment size – Rs 0.50 crore @ Rs15.0 crore.
3) Expected Return – Equity – 15% p. a. & Debt – 10 % P. a.
4) Financial Assistance
1) Upto 5 Crores – Funded max upto 75 % & 25 % share shall be that of the promoter.
2) More than 5 crores – Funded max upto 50%, 25 % to be funded by banks & 25 % share shall be that of the promoter.
5) Moratorium on principal – Upto 3 yrs. From the date of investment.
6) Nature of financial Assistance – Equity upto 25% & Equity related debt instrument such as convertible and non-convertible debentures.
7) Security:- Project Assets including land, building, plant & Machinery and rights
on licences / patents.
8) Time limit for completion of Project:- Up to 2 yrs from date of disbursement.
Selection Process
Screening Committee:-
1) The proposals shall be put up before the screening committee for initial analysis to see whether proposals are meeting the Eligibility criteria & Preliminary Appraisal Parameters.
2) After clearance of the Screening Committee, the proposal shall be taken up for detail appraisal negotiation & structuring.
Investment Committee:-
1) The detailed proposal shall be considered for sanction
2) The quantum of Assistance shall be decided by Committee
Legal documentation Stage:- After sanction of Investment Committee LOI along with Terms & conditions shall be issued to the investor. The investor has to execute all legal documents required.
Disbursement – Disbursement shall be made as per Terms & condition of sanction.
Preparation of Project Report:- The Technical Consultancy Organisations (TCO) promoted by IFCI shall help entrepreneurs for making a project proposal
Status of Venture capital Funds for SC up to 30/6/2015 – So far 11 entrepreneurs all over India have been given financial Assistance of Rs.44.96 Cr. Under this scheme. Out of these 11 entrepreneurs, 4 entrepreneurs belong to Maharashtra. ( Nagpur -2 & Pune -2)
The preliminary Appraisal Form & Detailed Due Diligence Modules and online application forms etc are available on Website social justice → Venture Capital Fund for Schedules Caste. (New)