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Venture Capital Assistance Scheme

Venture capital assistance is provided by SFAC to farmers and other agriculture sectors, to financially support in the form of an interest-free loan. The Indian economy is based on farming. Farming is the single largest private sector in India that contributes immensely to the growth of the Indian economy. The agricultural sector contributes about 17 % of GDP (Gross Domestic Product) and employs 60% of the population. This sector also known as the backbone of the Indian economy. The growth of this sector is necessary to supply the high demand or to support the change in food patterns throughout India.  


What is a venture capital assistance scheme? 

The scheme is named venture capital assistance and has been launched by the small farmer’s agri-business (SFAC) for the welfare of farmers and agripreneurs for the development of the agri-business The repayment schedule, the venture capital has to be repaid to the SFAC within the stipulated period. 
who qualify projects to meet the shortage of the capital requirement for the implementation of the project. This initiative of the government proves to be beneficial for agripreneurs to set up their agri-business as an occupation. It is one of India’s best efforts to elevate  agricultural entrepreneurship in India.  


Objective and benefits of the scheme  

This scheme is launched with a specific object which will be beneficial for the farmers and in the field of agri-business. There are many objectives and benefits of this scheme.  

The scheme supports entrepreneurs in setting up an agribusiness venture which is approved by the banks and financial institutions. The main aim of the scheme is to help farmers, producer groups, and agriculture graduates to participate in the value chain through the Project Development Facility. Consequently, it will strengthen the previous stages of the state and central SFAC. As well as it will provide the markets to the producers and increase rural income and employment.  

The benefits of the scheme are mainly to support the agripreneurs. The scheme helps in assisting agripreneurs to make investments in setting up agribusiness projects through financial participation. The SFAC will provide venture capital to agri-business projects in the form of an interest-free loan with easy returns. 

A flexible repayment schedule allows the applicant to repay the venture capital to the SFAC within the specified time period. 


Eligibility criteria 

  • Farmers 
  • Producer Groups 
  • Partnership/Proprietary Firms 
  • Self Help Groups 
  • Companies 
  • Agripreneurs (farmers-entrepreneur)  
  • Units in Agri export zones 
  • Agriculture graduates Individually or in groups for setting up agribusiness projects 


Quantum of loan 

The quantum of the loan depends on the project’s cost, the maximum and minimum amount is given below, according to the venture capital assistance scheme: 

  • Under the promoter’s equity, the quantum of the loan is 26%. 
  • The maximum limit of the loan amount under this scheme is INR 50 lakhs. 

The quantum of the loan for the project in the north-eastern part is different under this scheme, which is: 

  • Under the promoter’s equity, the quantum of the loan is 40% 
  • The maximum limit of the loan amount under this scheme is INR 50 lakhs. 


Documents required  

Here are the list of documents that are required to submit along with the application form: 

  • Promoter’s request letter 
  • Sanction letter of the sanctioning authority 
  • Banks’ approved appraisal 
  • The current statement of the account 
  • In the case of a partnership firm, the copy of the partnership firm certificate 
  • Equity certificate  
  • Farmer’s list/backward linkage duly supported by agreement 
  • Promoters' affidavit that they have not availed VCA in the past 
  • In case of unsecured loans acquired by the promoter, the CA certificate must be furnished 
  • Copy of current bank inspection report 
  • Bank’s confirmation is stating that they will not release collateral security without the SFAC approval 
  • Justification of margin on working capital was taken in project cost 


How to apply for a venture capital assistance scheme? 

You can apply for the scheme through the official website of the SFAC, the government of India. Follow the steps mentioned to fill in an application to avail yourself of the scheme.  

Step 1: The applicant must visit the official portal of the SFAC, Government of India 

Step 2: Click on the “Venture Capital Assistance Scheme (VCA)” tab which will be visible on the homepage of the portal. 

Step 3: On the same page, select “Online submission of venture capital assistance scheme Form” from the list of options to apply for the scheme through online mode. 

Step 4: Moving forward on the next page, click on the “Apply for New venture capital assistance scheme Application” link. 

Step 5: Click on the “Start Filing Application Form” button, then the application forms for the venture capital assistance scheme will open up. 
Step 6: Fill up the application form with the required details such as 

  1. Bank details 
  2. Name and Address of controlling office of branch 
  3. Status of Accounts 
  4. Cost of projects 
  5. Name of the consultant 

Step 7: After filling in the application form, you need to upload the documents required along with the form. The list of documents we mentioned above. 

Step 8: Finally click on the “Next” button to complete the process. 

When your application is submitted successfully then the bank or financial institution is liable for the approval of the loan amount. If they are satisfied with the above criteria, they will forward their approval of the project to the SFAC. The SFAC will process the loan amount for qualified projects. Your loan sanction will be approved. 

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