OBJECTIVE

RURAL AREA MEANS

The area comprised in any village includes the area comprised in any town, the population of which does not exceed 20,000 or such other figure as the Central Government may specify from time to time

ELIGIBLE BORROWERS:

The individual artisans/entrepreneurs, institutions, cooperative societies, Trusts and Self Help Groups are eligible for establishing a village industry subject to the said guidelines.

PATTERN APPROACH

Up till 1994-95, the A.P. Khadi & Village Industries Board had implemented the programme under pattern approach. The financial pattern of the scheme was prescribed by the Khadi & Village Industries Commission under pattern approach. The rate of interest was 4% for village industries and free of interest for Khadi Industry. The funding under this programme was discontinued which effect from 1st April, 1995 onwards.

The A.P. Khadi & Village Industries Board, Khammam has sanctioned to an extent of Rs.4.87 corres covering 6,240 beneficiaries since inception under different trades.

CONSOURTIUM OF BANK CREDIT PROGRAMME:

From the year 1995-96 onwards, a new approach called project approach has been introduced. According to the guidelines, the maximum project cost was limited to Rs.10.00 lakhs for an individual entrepreneur and Rs.25.00 lakhs for a Co-Operative Society/Institution.

The term Loan of 65% (interest bearing) of the Project cost was funded from Consortium of Bank Credit. Margin Money loan (interest free loan) of 25% (30% in respect of weaker section viz., SC/ST/Women/Minority/Ex-Servicemen and Physically Handicapped) of the project cost provided by Khadi & Village Industries Commission from budgetary resources. The remaining 10% (5% in respect of weaker sections) was provided by the entrepreneurs as their contribution for establishing and running the units. The Margin Money loan will be converted as grant after successful implementation of the schemes and after repayment of term loan in full.

The AP KVIB, Khammam has released an amount of Rs.113.73 lakhs to 34 units towards term loan Rs.76.50 lakhs and margin money Rs.37.23 lakhs.

MARGIN MONEY SCHEME:

The KVIC has introduced margin money scheme during the year 1996-97. This programme is linked with the Bank Finance. As per the guidelines, the maximum ceiling limit of the project cost is Rs.25.00 lakhs. The bank will sanction 90-95% of the project cost as loan and the entrepreneurs towards their contribution will bring remaining 10/5%. The board will sanction 25/30% of the project cost as margin money, which will be deposited in the bank as term deposit for two years on the name of the entrepreneur. This margin money, will be converted into grant after two years and credited to their loan account.

The AP KVIB, Khammam has released an amount of Rs.95.97 lakhs to 105 units during the year 1999-00 & 2001-02. The banks have released loan amount of Rs.241.11 lakhs.

CURRENT YEAR BUDGET

An amount of Rs.21.00 lakhs has been allotted as margin money for implementation of the KVI programmes in Khammam district during the current financial year. The target for employment generation is 151 persons. An amount of Rs.7.58 lakhs has been sanctioned to 3 units and the employment generated to 60 persons.