Venture Capital Fund for Scheduled Caste

Venture Capital Fund was launched by the Ministry of Social Justice and Empowerment, Government of India. It was done to promote entrepreneurship in the country among the scheduled castes by providing concessional finance to them.

Objectives of Venture Capital Fund

The objectives of the fund are listed below:

  • Provide concessional finance to SC entrepreneurs in a bid to create to wealth and value as well as promote profitable businesses.
  • Enhance direct and indirect employment generation for SC population
  • Help in developing SC entrepreneurs economically
  • Increase financial inclusion for SC entrepreneurs and to motivate them for further growth of SC communities

Features and Benefits of Venture Capital Fund

Some of the features and benefits of Venture Capital Fund are listed below:

  • Can avail financial assistance between Rs.20 lakh to Rs.15 crore.
  • For financial assistance up to Rs.5 crore, 75% of the loan shall be funded by the ministry.
  • The rate of interest for equity instruments is 15% while for debt or convertible instruments it is 8% per annum.
  • Women or disabled entrepreneurs can avail concessional finance at 7.75% p.a.
  • The tenure of financial assistance can be up to 8 years inclusive of moratorium period.

Eligibility Criteria for Venture Capital Fund

To be eligible for availing concessional finance from the Ministry of Social Justice and Empowerment, the following eligibility criteria must be fulfilled:

  • Companies having at least 51% stake holding by Scheduled Caste entrepreneurs for the past 6 or 12 months with management control.
  • A new company provided that the new Company is a successor entity of a Proprietary Firm/Partnership Firm/One Person Company (OPC)/Limited Liability Partnership (LLP) of any other establishment incorporated under any law in force. It should have a sound business model which has been in operation for over 6 or 12 months with the entity having at least 51% shareholding of the Scheduled Castes entrepreneurs with management control.
  • The SC promoters of Investee Company shall not dilute their stake below 51% in the company till the exit under the scheme.
  • 30% of the beneficiaries assisted under the scheme should preferably be women and/or disabled SC entrepreneurs holding at least 51% of the shareholding in the company.

Documents Required for Venture Capital Fund

In order to avail concessional finance, documentary proof of being SC must be submitted by the entrepreneurs at the time of submitting the proposals.

Moratorium Period

The moratorium period depends on case to case to basis, but it shall be not more than 36 months from the date of investment in the company.

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