SIDBI in collaboration with TIFAC has initiated the TIFAC – SIDBI Technology Innovation Fund (SRIJAN) scheme. The scheme intends to support MSMEs towards development, up-scaling and commercialisation of innovative technology-based projects. Under this scheme, SIDBI will provide term loan at a flexible interest rate to promote the innovation of new technology or product and its commercialisation. In this article, we look at the SRIJAN scheme in detail.
Objectives of the Scheme
The objectives of the SRIJAN scheme are explained below:
- To extend financial support in the term of soft loan to Indian industries particularly MSMEs for scaling up technology innovations developed at Research and Development.
- To promote the development of capabilities to create business opportunities in emerging technological areas.
- To facilitate commercialisation or scaling-up of innovative technologies in terms of novel process or product development.
The units eligible for assistance from SIDBI under SRIJAN Scheme are mentioned below:
- All new or existing MSME units .
- All commercial enterprises or partnership firms.
- All Private limited Companies.
- All Public limited Companies.
- All Start-up Companies.
Quantum of Assistance
The quantum of assistance under SRIJAN scheme is explained in detail below:
- Assistance will be up to 80% of the project cost subjected to a maximum of Rs.1 crore will be provided.
- Assistance more than Rs.1 crore will be considered on a priority basis.
Applicability of Projects for Funding
To avail assistance under this scheme, the projects should meet the following specified criteria.
- The significant changes or up-gradation in the existing product has to be done.
- Commercialisation of a new project or product has to be developed through innovative technology.
- Substantial improvement in the quality of the product, reduction in process steps, reduction of raw material consumption, reduction in GHG emission, reduction of energy consumption, reduction in cost, improvement in process efficiency and yield etc. has to be performed.
- Adaptation or variation in imported technology is required to make it suitable for the wider domestic application.
- Design, development and commercialisation of innovative projects or products should be based on new, advanced or renewable materials.
Expenditure Covered under the Project Cost
The activities or expense covered under the project cost area as follows:
- Construction, augmentation and modification of work shed are expected for the project implementation.
- Costs of technology and required substantial technology development for commercialization.
- The cost of fabrication, design and procurement of equipment, plants and machinery is needed.
- Testing and quality control equipment obtained for evaluation of standards or quality of the product, a process is required.
- The utilities and services are necessary for commercial-scale production
- Cost of raw materials for licensing of the plant towards evaluation and initial marketing is needed.
- Field trials towards limited market development are necessary.
- The cost of manpower expected for the project implementation period to be provided.
The processing fee of the SRIJAN scheme will not be more than 0.5% of the sanctioned amount.
Additionally, service tax is also applicable under this scheme.
Rate of Interest
The proposed rate of interest charged under the SRIJAN scheme will be at the rate of not more than 5% per annum.
Repayment of Loan
The loan repayment period including moratorium fixed for the borrower will be not more than six years from the date of project completion.
Primary security of moveable assets created or to be created under the project will be taken by way of hypothetical on a first charge basis. Security of land or building of the assisted project may also be taken.
The MSMEs seeking for financial assistance under this scheme may send a detailed project proposal either to TIFAC or SIDBI through the common application form. The technical evaluation of the project proposals will be carried out by TIFAC, and the financial appraisal will be recommended only by the SIDBI. The proposals recommended both technically and financially has to be sanctioned for implementation by a Project Approval Committee (PAC) consisting of SIDBI and TIFAC officials.
The application for submission of proposals is displayed below for quick reference.