labels: economy - general, agriculture
Rs48-crore VC assistance for agri business from GoInews
10 August 2005

Chennai: With a view to aggressively promote agribusiness project development in the country, the Government of India (GOI) has approved a Rs48-crore venture capital assistance to agribusiness projects and to set up a 'project development facility' to assist producer groups / organisations in preparation of economically viable detailed project reports.

The scheme envisages a single-window approach for extending venture capital along-with bank term loan / working capital to the beneficiary. The scheme will be operated by Small Farmer's Agribusiness Consortium (SFAC) and implemented in close association with nationalised banks, State Bank of India (SBI) and its subsidiaries and other commercial banks.

Venture capital assistance will be available to projects that are dependant on agricultural or allied produce, provide assured market to producers, encourage farmers to diversify to high value crops and are accepted by lending banks for grant of project term loan after satisfactory techno-commercial feasibility.

The amount of venture capital that SFAC will ordinarily provide to qualifying projects will be 10 per cent of total project cost or 26 per cent of the project equity or Rs75 lakh whichever is the lowest. Higher assistance can be provided to deserving projects on merit and / or to projects that are located in remote and backward areas, North-eastern and officially designated 'hill states' and projects sponsored by states or state SFACs.

The beneficiary is expected to repay the venture capital in lump sum to SFAC after full repayment of the Bank's term loan.

SFAC's project development facility will also provide financial support to farmer's, producer groups, units in agri-export zones, organisations and agriculture graduates in the preparation of bankable project reports.

The cost of the proposed agribusiness project has to be above Rs50 lakh. However, projects valuing Rs25 lakh and above proposed to be located in backward, hilly and North-eastern states could also be considered for PDF and venture capital assistance.


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Rs48-crore VC assistance for agri business from GoI