Sarothi – Startup Loan Scheme

The government of Assam has introduced Sarothi Startup Loan Scheme for new entrepreneurs in the State. This scheme is also known as the Chief Minister's Startup fund – Sarothi. The main objective of Sarothi scheme is to remove the hurdle of funds for the small startups in Assam. Under this scheme, the Government provides financial assistance in the form of a loan at a subsidized rate to all eligible entrepreneurs. In this article, we look at the Sarothi scheme of the Assam Government in detail.

The objective of Sarothi Startup Scheme

The objective of the Sarothi Startup Scheme is to encourage the young and novice entrepreneurs to get their ventures started by aiding them with funding. Assam Government provides financial assistance in the form of a loan through designated banks covering the whole of the state. The Assam Government will support the loan so availed by the entrepreneurs through Interest Subvention.

Financial Assistance and Interest Rate for Sarothi Loan

Under Sarothi Start-up Loan Scheme, Government provides Rs.10 lakh with 5% interest subvention to all eligible entrepreneurs
The concerned bank authority will debit interest subsidy at 5% after the completion of every quarter in a year
The entrepreneur will have to provide 15% of the total money required for setting up the entire project, and the bank will finance the rest of the amount through a loan

Processing Fee for Sarothi Loan

The bank will not charge any processing fees or documentation fees from the beneficiaries for Sarothi Loan. DIC will bear the processing fees or documentation fee, Government of Assam on behalf of the applicant as per the extant guidelines of the Bank or at a specified rate of 3% of the sanctioned amount as mutually agreed by the Bank and DIC, Assam Government.

Eligibility Criteria for Sarothi Start-up Scheme

Eligibility Criteria for applying Sarothi Start-up Loan Scheme are below:

All innovative startup industrial activities and the new individual applicant will be eligible to get the benefit under Sarothi scheme
New Micro, Small and Medium Enterprises (MSME) units in Assam are eligible for these benefits
Priority will be given to an applicant if he or she undergoes any skill development training
If the applicant is a defaulter of any Bank or Financial Institution, he or she will not be eligible for benefits under Sarothi scheme

Documents Required

Documents required for applying for Sarothi Loan are below:

Sarothi Start-up scheme application in the prescribed format
Black and White passport size photo – 2Nos
Entrepreneurs Memorandum Part-I ( EM part-I)
For the proposed scheme or project, the report needs to be submitted
Proof of Identity ( Aadhaar card, Voter ID, PAN Card or Driving License
Proof of Address (Ration card, Electricity bill, Telephone Bill, Bank Account Statement, Letter from reputed employer)
If the applicant has a trade license, it needs to be furnished
Caste certificate for OBC, SC or ST applicant
Disability certificate for physically handicraft applicant

Application procedure for Sarothi Start-up Loan Scheme

Novice enthusiasts who want to set a new business venture can follow the below-mentioned steps to get financial assistance under Sarothi scheme: Step 1: All eligible applicant need to apply in a prescribed format to the concerned general

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Step 2: DICC official will examine the application and forwarded to the District level Committee (DLC) for approval. Step 3: DLC and branch managers of AGVB in the district will select the beneficiaries for this scheme. Step 4: On receipt of the approval of the DLC, the proposal will be forwarded to the concerned Branch of AGVB for sanction of loan. Step 5: Brach will scrutinize the proposal thoroughly for sanction of loan within 30 days.

Repayment of Sarothi Loan

The entrepreneur has to repay the entire credit amount, along with the interest amount, within 5 years. The facility for repaying the credit amount in EMIs is available under this scheme.

Penalty

In case the beneficiary fails to make the EMI, then the corresponding bank will charge a penalty at a rate of 2% every year.

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Frequently Asked Questions

Common questions about Sarothi Startup Loan Scheme in Assam: Financial Assistance.

The Sarothi Startup Loan Scheme is a financial assistance program introduced by the Government of Assam to provide loans at subsidized interest rates to eligible entrepreneurs in the state. It aims to remove the hurdle of funding for small startups in Assam.

All innovative startup industrial activities and new individual applicants are eligible to get benefits under the Sarothi scheme. Additionally, new Micro, Small and Medium Enterprises (MSME) units in Assam are also eligible for these benefits.

Under the Sarothi Startup Loan Scheme, the Government of Assam provides a loan of up to Rs. 10 lakh with a 5% interest subvention to all eligible entrepreneurs.

The concerned bank will charge interest on the Sarothi Loan, and the Government of Assam will provide a 5% interest subvention to the entrepreneurs. The effective interest rate for the borrowers will be the bank's interest rate minus the 5% subvention.

No, the bank will not charge any processing fees or documentation fees from the beneficiaries for the Sarothi Loan. The District Industries and Commerce Centre (DIC) will bear these fees on behalf of the applicant.

The entrepreneur has to repay the entire credit amount, along with the interest amount, within 5 years. The facility for repaying the credit amount in EMIs is available under this scheme.

Some of the essential documents required for applying for the Sarothi Loan include a filled application form, identity and address proof, Entrepreneurs Memorandum Part-I, project report, caste certificate (if applicable), and disability certificate (if applicable).

The application process involves submitting the application to the concerned General Manager of the District Industries and Commerce Centre (DICC), followed by scrutiny and approval by the District Level Committee (DLC) and the concerned branch of Assam Gramin Vikash Bank (AGVB).

In case the beneficiary fails to make the EMI, the corresponding bank will charge a penalty at a rate of 2% every year.

Yes, priority will be given to applicants who have undergone any skill development training while considering applications for the Sarothi Startup Loan Scheme.