ISEC - Interest Subsidy Eligibility Certificate

The Interest Subsidy Eligibility Certificate (ISEC) for Khadi Institutions, under the aegis of The Ministry of Micro, Small and Medium Enterprises (KVIC), undertakes the funding of khadi programmes by khadi institutions. It mobilizes funds from the banking sector to fill the shortfall between availability of funds from budgetary sources and the actual fund requirements.

Features & Benefits of ISEC

The features and benefits of the programme are as follows:

  1. Concessional rate of interest of 4% per annum for the working capital is provided to institutions.
  2. The difference between the 4% and the actual lending rate is paid to the lending banks by the Central Government through the Khadi and Village Industries Commission (KVIC).
  3. A unified scheme to promote seamless release of the interest subsidy to the institutions has been approved by the government for khadi and polyvastra.

Interest Subsidy Eligibility

Khadi institutions with a sanctioned khadi programme and a valid khadi certificate registered with the state Khadi or KVIC and the Village Industries Boards (KVIB) who are engaged in the khadi and polyvastra sector are eligible to apply for this interest subsidy.

ISEC Registration Process

Khadi institutions have to apply for working capital to the financing bank. They have to apply with the ISEC certificate that is issued by the KVIC. The financing bank will then raise the claim for reimbursement to the nodal bank based on the working capital that is sanctioned. The reimbursement is for the differential interest rate that is over and above the 4%.

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