Rural Employment Generation Programme

Providing more and more new avenues of employment for rural unemployed people in the countryside has all along been the prime concern of Government of India.  

Keeping in mind the expectations of various sections of rural areas, the Ministry of A & R I, Govt. of India has launched REGP through KVIC, KVIB in a big way.  

I.    Eligible Projects:  

The Scheme is applicable to all new village Industry projects set up in “ rural area”. Any extension or renovation of existing unit will not be eligible for this facility.  

II.    Eligible Activities:  

All activities, which do not appear in the Negative List circulated by KVIC, are eligible for financing under the scheme.  

“ Village Industry” means any industry located in rural Area which produces any goods or renders any service with or without the use of power and in which fixed investment per head of any artisan or a worker does not exceed Rs.50, 000/-.  

III.    Eligible Borrowers:  

The eligible agencies under the scheme are (i) Individual artisans/entrepreneurs. (ii) Institutions, Co-operative Societies and Trust, and (iii) SHGs.  

(Partnership firms, Private Limited Companies, Joint Ventures, Jt. Borrowers, Co-obligators or HUF are not eligible under the scheme).  

IV.    Ceiling Limit of the Project:  

For individuals/institutions, the ceiling limit is Rs.25.00 lakhs.

V.    Rural Area:

“Rural Area” means-

1. Any area classified as Village as per the revenue records of the State/U.T. irrespective of population.

2. It also includes an area even if classified as town, provided its population does not exceed 20,000 (as per 1991 census).

VI.    Banks:           

1. All Public Sector Banks.

2. All Regional Rural Banks.

3. Co-op. Banks approved by the State/U.T. KVIBs.

4. Private Commercial Banks approved by the State KVIBs.

5. Other Financing Institutions of State & Central Govt. as approved by KVIC.

VII.    Sponsorship:

Sponsoring of projects by any agency is not mandatory. However, KVIC’s State/Regional offices and State KVI Boards/DICs may sponsor the project, if approached.  

VIII.    EDP Training:

Once the project is sanctioned by the financing branch of the Bank, before releasing the second installment of loan, the beneficiary is to be imparted 3-day EDP training arranged by the State/Regional Director.  

IX.    Margin Money:

Upto Rs. 10.00 lakhs, 25% of the project cost will be provided by KVIC as Margin Money. For projects above Rs.10.00 lakhs and upto Rs.25.00 lakhs rate of margin money will be 25% of the project cost upto Rs.10.00 lakhs plus 10% of the remaining cost of the project.

In case of weaker section beneficiary viz. SC/ST/OBC/women/Physically Handicapped/Ex-servicemen and Minority Community beneficiary/Institution and for Hill, Border and Tribal Areas, North Eastern Region, Sikkim, Andaman & Nicobar Islands, Lakshawdweep, Margin Money grant will be at the rate of 30% of the project cost upto Rs.10.00 lakhs and above this amount upto 25.00 lakhs, it will be 10% of the remaining cost of the project.  

X.   Borrower’s Contribution:

Under the Scheme, the borrower is required to invest his “ Own Contribution” of 10% of the project cost. In case of SC/ST/OBC/Women/Physically handicapped/Ex-servicemen and Minority Community and other weaker section borrowers, the contribution will be 5% of the project cost.

The maximum permissible limit for own contribution is 50% of the total project cost.  

XI.   Quantum of Loan:

Banks will sanction 90% of the project cost in case of general category borrower and 95 % of the project cost in case of Weaker Section beneficiary/institution and disburse full amount of the loan.  

XII.   Payment of Margin Money:    

After the sanction of the credit facility by the Bank branch, eligible amount of Margin Money will be kept in Term Deposit of 2 years in the name of the borrower at the lending bank branch, which will be credited to the borrower’s loan account after a period of two years from the date of first disbursement of loan.

Negative List:  

Activities under negative List (Not eligible for Margin Money under REGP) are:-

1. Meat (processing, canning and /or serving) and Intoxicant items (production /manufacture / Sale ).

2. Cultivation of Crops / Plantation , Animal Husbandry, Pisciculture, Piggery, Poultry etc. and  Khadi & Polyvastra.

3. Any project causing environmental problems.

Other than negative list any Project can be established which fulfils the prerequisites as mentioned above.