Frequently Asked Questions
1. What is the genesis of “Deen Dayal Upadhyaya Swalamban Yojana”?
The State Government of Arunachal Pradesh has initiated Deen Dayal Swavalamban Yojana, a startup loan scheme. Under the Deen Dayal Swavalamban Yojana, the State Government is providing financial assistance in the form of subsidy on startup loan. This scheme aims to encourage unemployed youths to gain access to low-cost capital for setting up of entrepreneurship.. The “Deen Dayal Upadhyaya Swalamban Yojana” initiative was announced in the Budget speech of the Finance Minister in March 2017 to encourage unemployed youth for Entrepreneurship through formal banking channels. The scheme would be operated through all bank branch networks of scheduled commercial banks across the State.
2. What is the objective of “Deen Dayal Upadhyaya Swalamban Yojana”?
The objective of the Deen Dayal Upadhyaya Swalamban Yojana scheme is to encourage unemployed youth to gain access to low-cost capital for entrepreneurship. Under the Deen Dayal Upadhyaya Swavalamban Yojana, the State Government is providing financial assistance in the form of 40% front-ended subsidy to beneficiaries who wish to set up small and medium enterprise with a project cost above Rs. 10.00 Lakhs up to Rs.50 .00 lakh. Women entrepreneurs are additionally eligible for 5% interest subsidy annually provided the entrepreneur does not become a Non-Performing Entity (NPE). The sectors covered under the scheme are; a) Food-processing units in agriculture and allied sectors including packaging, cold chain, cold storage, milk processing, etc. b) Eco-tourism including homestays and tour operators. c) Traditional textile weaving for modernisation of traditional looms and purchase of new looms. d) Small scale manufacturing units/bamboo processing units/service centers/ diagnostic centers, etc. e) Others- Any other innovative business ideas.
3. Who are the target beneficiary under Deen Dayal Upadhyaya Swalamban Yojana / what kind of borrowers are eligible for loans?
Unemployed APST entrepreneurs who wish to set up a new business enterprise are eligible for availing loans and subsidies under Deen Dayal Upadhyaya Swalamban Yojana.
4. WHICH LENDING INSTITUTION WILL PROVIDE THE LOAN TO THE BENEFICIARY? HOW MUCH LOAN WILL BE PROVIDED TO THE ELIGIBLE BENEFICIARIES? HOW MUCH DOES THIS BENEFICIARY NEED TO CONTRIBUTE?
The loan under Swalamban Yojana can be availed from a branch of any Scheduled Commercial Banks located across the state. The loan component would be 30% to 50% of the project cost. The cost of land and building shall be excluded from the project cost. Entrepreneurs would be required to contribute at least 10% to 30% of the project cost as their contribution. Preference will be given to those who contribute a greater proportion.
5. What is the rate of interest charged under the Deen Dayal Upadhyaya Swalamban Yojana?
There can be slight variation between banks. For SBI, it is 3.25 to 3.50. Above EBLR( at present 7.55%)
6. What is the support available from Govt. of Arunachal Pradesh?
The support available from Govt. of Arunachal Pradesh under DDUSY is 40% front-ended capital investment subsidy. Women entrepreneurs will get an additional 5% interest subvention annually, but the loan must not become Non-Performing Entity(NPE)
7. What is front ended capital subsidy?
In front-ended subsidy, beneficiaries can get subsidy credited upfront to the loan account after sanction of the loan in the initial stages of any business activity.
8. What is 5% interest subvention for women beneficiaries?
Suppose the bank charges an interest of 12% on the loan availed by the entrepreneur under the ‘Swalamban Scheme’, the women beneficiary will get loan at 7% rate of interest which will be in addition to the front-end subsidy.
9. What is the margin money/ own contribution to set up an unit under Swalamban Yojana?
Entrepreneurs would be required to contribute at least 10% to 30% of the project cost as margin money/ their contribution. Preference will be given to those who will contribute greater proportion
10. How to apply for this scheme?
The interested entrepreneurs will have to apply for the scheme through DDUSY online web portal https://ddusyarunachal.in/. The applicant has to prepare a concept note/DPR on any one of the eligible activities which he/she intends to take up as an enterprise, can submit the application to the Deputy Commissioner’s Office, through DDUSY web portal. Before submitting the application, the entrepreneur should satisfy himself/herself that the activity chosen by him/her is viable or not for the business.
11. How are applications under DDUSY are processed?
- The application submitted by the applicant through the web portal will be first scrutinized by District Planning Officer and if it is found in order, it will be sent to the District Lead Bank Manager of the district for CIBIL score check to ascertain whether the applicant is a loan defaulter or not?
- District Planning Officer (DPO) who also functions as ‘Entrepreneurship Development Office’, will convene ‘District Level Screening Committee meeting’ (DLSC) under the chairmanship of the Deputy Commissioner.
- The applicants who have made it through CIBIL score check will attend the interview and make a presentation before the DLSC. The project proposal found suitable by the DLSC will be selected for field verification
- After field verification, the DLSC will recommend selected applications to District Lead Bank Manager for forwarding to the appropriate branch in respect of the applicant’s area of operation. The Branch Manager of the bank after receiving the application will evaluate the project from the viability angle and if the project is considered viable, the entrepreneur will be extended the loan after completing all necessary documentation required by the bank.
12. What are the schemes available for projects up to 10 lakhs which are not covered under DDUSY?
The banks also sanction such loans up to Rs. 10.00 Lakhs under Mudra Scheme. Please visit www.mudra.org.in for further details.
13. What will be the security requirement under the Deen Dayal Upadhyaya Swalamban Yojana?
Collateral Security not to be insisted as the loans are to be covered under CGTMSE. However, if the borrower is not willing to bear the guarantee fee & premium for CGTMSE, then collateral security as per Bank’s norms need to be obtained.
14. What is the repayment tenure under the scheme ?
The repayment period of the composite loan is to be fixed depending upon nature of the activity and useful life of assets purchased with bank loan but not to exceed 7 years including moratorium not exceeding 6 months. Annual review to be done for all loans.
15. How one can get handholding support?
Arunachal Pradesh lnnovation and lnvestment Park (APPIP) is set up at Itanagar under Planning & lnvestment Division of Finance, Planning & Investment Department which is providing access to resources and expertise to young entrepreneurs for their startups and new ventures. Any kind of startup projects under DDUSY can have handholding with Arunachal Pradesh lnnovation and lnvestment Park (APllP) for necessary support and guidance.
16. Is plantation activity eligible under the scheme?
No, only value addition activities aimed at setting up a unit under Agri-Horti & allied activities are eligible.
17. How bank will sanction the loan and claim the subsidy ?
- Banks will scrutinize the proposals as per their prescribed norms.
- Banks to help applicants in filling up of loan application form prescribed by the respective banks.
- Banks to sanction loans to selected beneficiaries within a reasonable time from the date of receipt of application from DLSC.
- Banks will submit subsidy claim to Planning & Investment Division of Finance, Planning & Investment Department along with details of loan sanctioned under the scheme.
18. Will Govt. Agencies prepare DPR for Beneficiaries?
Applicants have to prepare DPR themselves but can seek assistance/guidance if required from Arunachal Pradesh lnnovation and lnvestment Park (APllP) and the concerned district head of department in preparation of the DPR.