ISEC Scheme for Khadi Institutions 2025: Interest Subsidy for Khadi

Benefits:

1. Interest Subsidy:
   The main benefit is the interest subsidy on loans, reducing the financial burden on Khadi institutions and making credit more affordable.

2. Affordable Financing:
   The 4% annual interest rate makes financing more affordable, encouraging Khadi institutions to continue their operations and expand their activities.

3. Flexible Repayment Terms:
   Institutions can enjoy flexible repayment terms, allowing them to manage their finances without undue pressure.

4. Support for Development:
   The scheme promotes the growth and development of Khadi institutions, enabling them to thrive in a competitive market.

5. Encouragement for Sector Growth:
   The scheme encourages more institutions to invest in Khadi and polyvastra production, contributing to the growth of India’s traditional industries.

6. Promoting Rural Employment:
   By supporting Khadi institutions, the scheme indirectly promotes rural employment and entrepreneurship, aligning with national goals for sustainable development.

7. Long-Term Empowerment:
   Institutions that benefit from this scheme can build their capacity, contribute to rural development, and empower local communities.

Eligibility:

1. Khadi Institutions:
   Institutions must hold a valid Khadi certificate and have sanctioned Khadi programs to be eligible for financing under the ISEC Scheme.

2. Registration with KVIC or State Khadi and Village Industries Boards:
   Only Khadi institutions registered with KVIC or State Khadi and Village Industries Boards (KVIBs) can apply for financing under this scheme.

3. Khadi and Polyvastra Sector Only:
   The scheme supports only institutions involved in Khadi and polyvastra production.

Application Process:

Offline Process:

1. Application to Financing Bank:
   The Khadi institutions must apply to the financing bank for working capital. They need to present the ISEC certificate issued by KVIC along with their application.

2. Reimbursement Claim:
   After the working capital is sanctioned, the financing bank raises the reimbursement claim to the nodal branch for the differential interest rate, ensuring the institutions pay only the concessional rate of 4%.

Documents Required:

• Aadhaar Card: Proof of identity for the institution.
• Income Certificate: To verify the institution’s financial status.
• Caste Certificate: If applicable, for identifying the institution’s eligibility for reserved benefits.
• Bank Account Statement: To validate the institution’s banking information.

Frequently Asked Questions (FAQs):

Q1: What is the ISEC Scheme?
A1: The ISEC Scheme gives concessional credit of 4% interest to Khadi institutions and the government absorbs the differential interest rate.

Q2: How do I get the ISEC Scheme?
A2: Offline application by Khadi institutions is made to the financing bank on producing an ISEC certificate by KVIC.

Q3: Who can apply for the ISEC Scheme?
A3: Khadi institutions possessing valid Khadi certificates and registered with KVIC or KVIBs are eligible for the scheme.

Q4: What is the advantage of the interest subsidy?
A4: The subsidy renders credit affordable by bringing down the interest rate to 4%, decreasing financial burden on Khadi institutions.

Q5: Can I apply for the ISEC Scheme after availing an education loan?
A5: The ISEC Scheme is different from education loans but is restricted to Khadi institutions for purposes of financing operations.

Q6: Is there a particular income limit for qualifying?
A6: There isn’t any limit on income stated for qualification but institutions have to qualify under Khadi certification and registration.

Q7: Is there any exclusivity from the ISEC Scheme?
A7: The scheme does not avail institutions that have no involvement with Khadi and polyvastra production.

Q8: Through what mechanism is the interest subsidy paid?
A8: It is paid by KVIC to the financing bank, who transfers it to the institution.

Q9: Can I monitor the status of my application under the ISEC Scheme?
A9: Institutions can contact their financing bank or KVIC to monitor the status of their application.

Q10: Where can I get more information on the ISEC Scheme?
A10: Further information is available on the KVIC website or by approaching the concerned authorities.

Sources and References:

• Guidelines.