National Equity Fund (NEF)

Organisation

Small Industries Development Bank of India (SIDBI)

Objective

To provide equity type assistance to SSI units, tiny units at five per cent service charges.

Eligibility

The following are eligible for assistance under the scheme:- New projects in tiny and small scale sectors for manufacture, preservation or processing of goods irrespective of the location (except for the units in Metropolitan areas); Existing tiny and small scale industrial units and service enterprises as mentioned above (including those which have availed of NEF assistance earlier), undertaking expansion, modernisation, technology upgradation and diversification irrespective of location (except in Metropolitan areas); Sick units in the tiny and small scale sectors including service enterprises as mentioned above, which are considered potentially viable, irrespective of the location of the units (except for the units in Metropolitan areas); & All industrial activities and service activities (except Road Transport Operators).

Brief

The scope of this scheme was widened in 2000-01 raising the limit of loan from Rs. 6.25 lakhs to Rs. 10 lakhs and project cost limit from Rs. 25 lakhs to Rs. 50 lakhs. Project cost (including margin money for working capital) should not exceed Rs. 50 lakhs in the case of new projects in the case of existing units and service enterprises, the outlay on expansion/modernisation/technology upgradation or diversification or rehabilitation should not exceed Rs. 50 lakhs per project.  There is no change in the existing level of promoters' contribution at 10% of the project cost. However, the ceiling on soft loan assistance under the Scheme has been enhanced from the present level of 15% lakh per project to 25% of the project cost subject to a maximum of Rs. 10 lakhs per project. 30% of the investment is earmarked for tiny units.