Entrepreneur Development Scheme

Entrepreneur Development Scheme

As a measure to boost entrepreneurship and to nurture budding talents, the Tamil Nadu Government has initiated a measure known as Entrepreneur Development Scheme to encourage and educate persons from economically and socially disadvantaged backgrounds to pursue their businesses, thereby promoting entrepreneurship in the State. The task of administering and implementing the scheme is entrusted with the Tamil Nadu Industrial Investment Corporation Limited. Tamil Nadu Government provides financial support to young entrepreneurs and professional under this EDS scheme. In this article, we will look at the Entrepreneur Development Scheme in detail.

Know more about Traits of a Successful Entrepreneur

Objective of the Entrepreneur Development Scheme

Entrepreneur Development Scheme has been introduced with the specific objective of encouraging entrepreneurship among the persons from economically and socially disadvantaged background who wish to promote their own business, to generate income and to lead a life of dignity.

Eligibility Criteria

The eligibility criteria for Entrepreneur Development Scheme are explained in detail below:

  • First generation entrepreneurs – Persons without any asset back up but having relevant qualifications and experience for implementing the viable project (business) is eligible for this scheme
  • Entrepreneurs who are engaged in the manufacturing process, service, value addition activity are targeted under this scheme
  • The promoters should have knowledge and experience in the particular line of proposed business
  • Existing small-scale units requiring assistance for additional machinery or needs additional working capital can apply for Entrepreneur Development Scheme

Eligibility Criteria – Transport Loan

The eligibility criteria for transport loan under the Entrepreneur Development Scheme are explained as follows:

  • For transport loan cases, assistance under these schemes will be considered only for Owner Drive category that is the entrepreneur should have a valid license with a badge for auto and tourist taxi support for the purchase of tourist taxies
  • Loan/Assistance for subsequent vehicles to the same person will be considered as Non-owner driven category
  • For small-scale industrial units requiring load vehicles, assistance will be provided under Non-owner driven category
  • The vehicle should be registered as a Private Vehicle in the name of the applicant unit

Non-Eligibility 

Loan advances to the following activities will not be considered under the Entrepreneur Development Scheme.

  • Educational and Training Institutions (including professionals & computers in any form
  • Group Loans such as Loans to Self Help Groups
  • Wholesale and Retail Trading

If the Applicant, Spouse, Children owns the immovable property, then such applicant is not eligible under this scheme.

Quantum of Assistance

The assistance under the Entrepreneur Development Scheme is given here:

The minimum loan limit under this scheme will be Rs.50000. The maximum loan assistance will be Rs.5 lakhs or 30 times on the net salary of the two guarantors whichever is lower.

Composite loan

The term and working capital loan will be sanctioned as a composite loan as a maximum of Rs.5.00 lakhs. Working capital will be sanctioned to units not exceeding the term loan amount or Rs.50, 000 whichever is higher.

Working capital to Artisans under this Entrepreneur Development Scheme is Rs.50,000.It will be granted with the proper assessment

Margin Money

The promoter’s contribution will be a minimum of 10% on the project cost.

Project Processing fee

The pre-operative expenses payable by a promoter such as a processing fee will be included in the project cost. However, the promoter needs to pay 1% on the loan amount initially and 0.5% on the loan amount sanctioned at the beginning of every year as the Risk Coverage Fund as the Corporation bears the entire risk.

Repayment Details

The repayment will be fixed between two and five years with a moratorium of three to six months.  The repayment will be fixed based on the cash flow and future life of the equipment.  For business purchasing electronic items, the repayment will be for three years.

Rate of Interest

The interest for Entrepreneur Development Scheme will be charged on the compound basis at a monthly rest, besides the penal interest of 2.5% on the defaulted EMI for the defaulted period.

The details of the rate of interest are given in this document:

Security

Primary assets scan be mortgaged or hypothecated to Tamil Nadu Industrial Investment Corporation Limited. In case of loan is applied for expansion of unit, the charge on the existing assets will be extended.

Guarantee

Third party guarantee will be obtained for assistance under as Entrepreneur Development Scheme. The eligibility criteria for guarantors are given here:

  • For loans up to Rs.2.00 lakhs, the party guarantee will be obtained from one person
  • For loans above Rs.2.00 lakhs, the party guarantee will be obtained from two persons

Guarantors Eligibility In case of Employee

  • The guarantors should be an employee of Central, State Government or Government undertakings or Public Sector Banks, Financial Institutions or any other organisations established by Central, State Government inclusive of Co-operative Societies and educational institution established by Central and State Government.
  • The guarantor’s age should be below fifty years.

Guarantors Eligibility In case of Land Owner

  • The guarantor should have land and building worth equal to or more than two times of the loan amount. Note: The Tamil Nadu Industrial Investment Corporation Limited (TIIC) official will assess Value of the property.
  • The guarantor’s age should be below sixty years.

Application Registration Fees

The applicant has to remit Registration Fees for Entrepreneur Development Scheme at the time registration of the application.

Sl.NoLoan DetailRegistration Fees
1Loans processed by Branch Sanction Committee (BSC)Rs.10000
2Loan granted by Regional Level Sanction Committee (RLSC) Rs.10 Lakhs
3Loan by EC / Board at Head OfficeRs.50000

Investigation Fees

The Investigation fees are inclusive of Registration Fees, and it needs to be paid by the applicant before the loan proposal is sanctioned in the respective sanction committee. 

For more details, kindly visit the Tamil Nadu Industrial Investment Corporation Limited

Documents Required

Documents required for applying the Entrepreneur Development Scheme is explained in detail below:

  • Entrepreneur’s Memorandum
  • Firm Registration Certificate
  • Partnership Deed
  • Memorandum & Articles of Association
  • Certificate of Incorporation in case of Companies
  • Copy of Bye-laws in case of Society
  • Bio-Data and Net-worth Statement in respect of each of the promoters, Directors and Guarantors
  • Important Educational and Technical Experience Certificate
  • Documents for KYC Compliance
  • Details of the Associate Concerns
  • Copies of Audit Balance Sheet and Profit & Loss Account for the associate concern along with schedules for the last three years
  • Audited Balance Sheet
  • Copy of Lease Deed or Purchase Agreement
  • Sale Deed, Parent Documents, Patta, Chitta, Adangal, Tax Receipt, FMB Sketch
  • Encumbrance Certificate
  • Approved Building Plan
  • NOC / Consent Order from the Pollution Control Board
  • Licenses like Drug License / EPCG License
  • Market tie-up letters

Entrepreneur Development Scheme Application Procedure

The application procedure for Entrepreneur Development Scheme is explained in step-step by procedure here:

Step 1: The entrepreneurs need to apply in the prescribed application form for Entrepreneur Development Scheme.

The application form for EDS scheme can be obtained from the Head Office or Branch Offices of the Corporation, or you can also download the application form from official website of TTIC.From the home page select Application form download option under the scheme.

Image 1 Entrepreneur Development Scheme
Image 1 Entrepreneur Development Scheme

The list of application form will be displayed, click on Application for Financial Assistance for Industrial Units.

Image 2 Entrepreneur Development Scheme
Image 2 Entrepreneur Development Scheme

We have herewith attached the application form for Entrepreneur Development Scheme.

TIIC-TL-APPLN-FORM-2-20

Step 2: Fill the application form with the following details and apply to the Head Office or Branch Office of Tamil Nadu Industrial Investment Corporation Limited.

Step 3: The concerned authority will scrutinise the application. The committee will examine the application for a loan and recommend concerned authority sanction.

Step 4: The authority will appraise the project both technically and economically with the approved project cost of TIIC.

After deposit of promoter contribution by the applicant and receipt of subsidy claim, the loan will be released to the applicant account

Post by Renu Suresh

Renu is experience content writer specialised in compliances and company rules.