Govt launches novel credit scheme for cooperative startups
New Delhi: Agriculture Minister Radha Mohan Singh Wednesday announced the launch of a scheme that aims to provide cheaper loans to startups in the cooperative sector and those having innovative projects costing up to Rs 3 crore.
The 'Cooperative Enterprise Support and Innovation Scheme' will be implemented by the National Cooperative Development Corporation (NCDC) and will be linked to its Cooperative Startup and Innovation Fund (CSIF) that has an annual corpus of Rs 100 crore.
"The new scheme aims to encourage newly formed cooperatives to take advantage of innovative ventures, especially by societies having new and innovative ideas," Singh said after inaugurating the 65th All India Cooperative Week organised by the National Cooperative Union of India (NCUI) here.
Cooperatives operating for at least for one year and having a positive net worth are eligible to avail credit under the scheme for new and innovative project ideas, he said.
The project cost should not exceed Rs 3 crore and there will be two years moratorium on payment of principal amount, he said, adding that the period of moratorium may vary depending on type of project and ability to generate revenue.
As an incentive, the minister said the credit will be provided at 2 per cent less than the applicable interest rate on term loan for the project activities.
The interest rate incentive would be applicable only for timely repayers. The scheme would be liberal to cooperatives in the north eastern region, those registered and operating in 'aspirational districts' identified by think-tank Niti Aayog as well as cooperatives which have 100 per cent women and SC/ST members.
Asserting that the Modi government is strengthening cooperative institutions, Singh said, "We are not just strengthening on paper, but working hard on ground in every state."
Consequently, the loan amount sanctioned by NCDC has been on the rise since 2014 when the present government came to power. In the previous regime, about Rs 5,000 crore loans were sanctioned annually by NCDC, but it has doubled in the last four years, he said.
NCDC has sanctioned Rs 12,965 crore loans till November 13 of the current fiscal.
While emphasising on the role of cooperatives in achieving the government's target of doubling farmers income by 2022, the minister called upon all 8 lakh cooperatives to focus on improving their governance and efficiency by computerisation.
Expressing concern over lack of transparency and governance in functioning of cooperatives, NCUI President Chandrapal Singh Yadav said, "It is for this reason many cooperatives are shut. Earlier, 75 per cent of cooperatives were in lending business but now it is only 15-16 per cent. The commercial banks have taken over."
There is a need to revive closed cooperative units and involve more youth and women, he added.