Personal Interest Subsidy Scheme
By Uttarakhand State Khadi and Village Industries Board
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Quick Answer
Interest subsidy on bank loans for rural entrepreneurs in Uttarakhand setting up small industries, for projects up to ₹5 lakh.
- Funding amount
- Up to ₹5L
- Funding type
- Subsidy
- Application deadline
- Rolling
- Location
- Uttarakhand
About this subsidy
Rural entrepreneurs in Uttarakhand can get an interest subsidy on bank-financed projects costing up to ₹5.00 lakh. The Uttarakhand State Khadi and Village Industries Board, under the Government of Uttarakhand, launched the scheme in 2016. You pay only 4% annual interest on the project loan. The government covers the rest of the interest, up to a maximum of 10%.
The scheme is for small-scale industries that use local raw materials, set up in a rural area. You must be 18 to 45 years old and a permanent resident of Uttarakhand. You qualify if you are an educated unemployed youth no longer eligible for government service due to the age limit, or trained by an Industrial Training Institute (ITI) or a Polytechnic. A woman interested in self-employment can also apply, as can someone who has passed Vocational Education (10+2 level) with Village Industries as a subject.
Eligibility
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Subsidy providers
Benefits & Funding
- Amount
- Up to ₹5L
What You Get
- Subsidized Interest on Bank Loans: The core benefit is a significant interest subsidy on bank-financed projects. Entrepreneurs are required to bear only 4% annual interest on their project loans, while the Government of Uttarakhand subsidizes the remaining interest component, up to a maximum of 10%. This dramatically reduces the financial strain on new rural enterprises, making project financing more accessible and sustainable. The maximum project cost eligible for this subsidized financing is ₹5,00,000.
- Access to Capital for Rural Development: The scheme facilitates crucial access to formal banking channels, enabling entrepreneurs to secure necessary capital for setting up and operating their businesses. This access is vital for stimulating economic activity in rural areas where conventional funding avenues might be limited.
- Support for Local Industries: By focusing on industries utilizing local raw materials and resources, the scheme not only promotes self-employment but also encourages value addition within the state, creating local supply chains and strengthening the village industry ecosystem.
- Empowerment of Target Groups: Beyond financial aid, the program implicitly offers empowerment by specifically targeting educated unemployed youth and women, providing them with the means to achieve financial independence and contribute actively to their communities.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
Applications submitted to the District Village Industries Offices undergo a thorough screening process. A local committee comprising officials from the Uttarakhand State Khadi and Village Industries Board and potentially other district administration representatives will review each application to verify eligibility criteria, assess the viability of the proposed project, and confirm the availability of local raw materials. Successful applicants will then be guided through the bank loan application process, with their projects evaluated for financial feasibility by the collaborating banks. Final selection for the interest subsidy is contingent upon the bank's approval of the project loan, followed by the department's final sanction of the interest differential.
Application Process
- 1
Visit Website
Access the official website of UKVIB for scheme details.
You - 2
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How to apply
Four steps from draft to disbursement — one action each.
- 1
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 2
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 3
Submit on the official portal
Use the official application link and verify all details before final submission.
- 4
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Program templates & documents
Files the program publishes for applicants — download these and apply in the prescribed format.
Frequently Asked Questions
What is the maximum project cost covered under this scheme?
The scheme provides assistance for financing projects with a maximum cost of **₹5 lakh** through banks. The subsidy is applied to the interest incurred on this loan amount.
What is the interest rate an entrepreneur has to pay?
Under this scheme, the entrepreneur is required to pay a fixed 4% interest on the bank-financed project cost. The government subsidizes the remaining interest, up to a maximum of 10%.
Who is eligible to apply for this scheme?
The scheme is open to permanent residents of Uttarakhand aged 18 to 45. Eligible applicants include educated unemployed youth (especially those past the age limit for government service), individuals trained by an Industrial Training Institute (ITI) or a Polytechnic, and women interested in self-employment. Additionally, individuals who have passed Vocational Education (10+2 level) with Village Industries as a subject are also encouraged to apply.
Where must the project be established?
To be eligible for the scheme, the proposed project must be established in a rural area within Uttarakhand, emphasizing local development.
How does the application process work?
The application process is primarily offline. It involves visiting the official website of the Uttarakhand State Khadi and Village Industries Board to download the Application and Claim Forms. These forms must be filled out, along with all necessary supporting documents, and submitted to your local District Village Industries Office for processing.
What type of businesses are supported by this scheme?
The scheme supports entrepreneurs looking to set up industries based on the availability of local raw materials and their working/resource capacity, primarily focusing on village industries and small-scale manufacturing in rural areas.
Is prior business experience required?
The scheme primarily targets educated unemployed youth and individuals interested in self-employment, implying that extensive prior business experience is not a strict prerequisite, focusing more on potential and local resource utilization.
What documents are typically required for application?
While not explicitly listed, common documents would include proof of identity and residency (Uttarakhand domicile certificate), age proof, educational or training certificates, a detailed project proposal, bank account details, and any other forms specified in the application kit.
