IFCI is a public sector non-banking financial company that is currently listed on the NSE and BSE. It provides financial assistance for the growth of industries in India. These activities are aligned to projects in the airport, road, power, telecom, real estate, and manufacturing sectors.
IFCI is also a nodal agency that encourages entrepreneurship in the lower sections of the society. In this regard, IFCI provides guarantees to banks against loans offered to young entrepreneurs who belong to Scheduled Castes.
IFCI has always helped in the modernisation of industries in the country, improvement of export promotion, nurturing of sunrise industries, etc. through initiatives that are market-friendly. There are three segments of financial products offered by the company, as indicated below:
IFCI is also involved in providing structured debt products to customers. Additionally, it offers loan solutions such as sponsor financing, pre-IPO financing, acquisition financing, and Off-Balance Sheet Structured Solutions.
The government financing schemes involving the IFCI are as follows:
As part of the Union Budget 2014-15, the government announced a sum of Rs.200 crore to be allocated for the credit enhancement needs of young entrepreneurs belonging to Scheduled Castes in the country. Loans under this scheme would be provided to start-ups in which the founding members belong to Scheduled Castes. The Ministry of Social Justice and Empowerment is the sponsoring agency for this scheme and IFCI is responsible for implementing it.
Purpose of the Scheme:
The motive of the scheme is to encourage entrepreneurial skills and job creation in the lower sections of the society. The scheme also looks to provide credit enhancement guarantees to banks and other financial institutions that will be assisting Scheduled Caste (SC) entrepreneurs. This programme is a social inclusion initiative as well.
The initial corpus set aside by the government towards this scheme was Rs.200 crore. This is being used to provide funding to Member Lending Institutions (MLI) for extension of term loans, working capital loans, or composite term loans to SC entrepreneurs.
The duration of the scheme was expected to be 7 years from the initial date of implementation. This was expected to be reviewed and extended for another 7 years from the date of set up of each corpus.
This is initially 1 year. It can be renewed after every passing year for the entire loan tenure. The maximum tenure can be 7 years, as long as timely payments of the renewal fee are made by the MLI in favour of the individual who has availed the loan.
Closing of the Fund:
This is an open-ended scheme that works on a first-come first-served basis for MLIs till the corpus is completely exhausted.
Amount of Guarantee:
The guarantee details are as indicated in the table below:
|Rs.15 lakh to Rs.1 crore||Rs.1 crore to Rs.2 crore||Rs.2 crore to Rs.5 crore||Above Rs.5 crore|
|Amount of guarantee cover||100% of the sanctioned amount||80% of the sanctioned amount||70% of the sanctioned amount||60% of the sanctioned amount|
|Cover available||Rs.15,000 to Rs.1 crore||Rs.1 crore to Rs.1.6 crore||Rs.1.6 crore to Rs.3.5 crore||Rs.3.5 crore to Rs.5 crore|
The guarantee cover will be associated with a lock-in period of 1 year from the date of loan disbursement. The claims made under the guarantee will not be entertained by IFCI if the account changes to an NPA during the lock-in period.
IFCI has been the nodal agency for the Indian government since the time the Sugar Development Fund (SDF) was proposed. The motive of this scheme is to disburse, follow-up, and recover SDF loans that are provided to private sugar factories for the following purposes:
IFCI takes ownership of the examination and execution of the loan. The inspection of security documents, recommendation for the release of funds, arrangement of site visits, maintenance of loan accounts, recovery of SDF dues, verification of loan utilisation, and implementation of legal measures against defaulting borrowers are some of the other functions of the IFCI.
IFCI also performs financial appraisals of SDF loan projects for sugar mills.
The M-SIPS scheme was set up by the Ministry of Electronics and Information Technology (MeitY) to promote large-scale manufacturing in the country. The scheme initially received applications for 3 years. Later on, it was extended, and new product categories were added to the scope of the project. The incentives provided by the programme will be available for 5 years from the approval date of the application.
The scheme provides 20-25% subsidy for capital expenditure investments in the setup of electronic manufacturing units. Incentives are given for four categories of electronic products. The units included in the value chain are procurement of raw materials, assembly, testing, and packaging.
Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.