Scheme for Cottage and Village Industries (Composite Loan Scheme)
By Pondicherry Industrial Promotion Development and Investment Corporation (PIPDIC)
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Quick Answer
Up to ₹25 lakh as a composite term loan and/or working capital loan for new or existing micro enterprises in Puducherry.
- Funding amount
- Up to ₹25L
- Funding type
- Debt
- Application deadline
- Rolling
- Location
- Puducherry
About this loan
New and existing micro enterprises in Puducherry can get up to ₹25,00,000 per unit as a composite term loan and/or working capital loan, for new machinery and equipment and for working capital. PIPDIC and the Department of Industries & Commerce run the scheme. Repayment is up to 8 years, including a moratorium of up to 1 year.
The promoter must live in Puducherry, and the project must be in Artisans Village and Cottage Industries, Small Industries in the tiny sector, or Micro Enterprises. Machinery cost is capped at ₹25,00,000 per unit. The Debt Equity Ratio (DER) is 3:1. Interest is 10% per annum, and 0.5% less for units promoted by Women, SC, ST or Differently Abled persons.
Immovable property is required as collateral, besides mortgage/hypothecation of the fixed assets. Its value must be at least the term loan if it is in Puducherry, or 150% (land with building) or 200% (only land) of the loan if outside. For Women, SC, ST or Differently Abled promoters it is 50% of the loan.
Eligibility
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Grant providers
Provider
Pondicherry Industrial Promotion Development and Investment Corporation (PIPDIC)Puducherry · Puducherry · India
Benefits & Funding
- Amount
- Up to ₹25L
- Fund type
- Debt
- Repayment
- Repayable
What You Get
The scheme provides financial assistance up to ₹25,00,000/- per unit, offered as a composite term loan and/or working capital loan. These funds can be utilized for acquiring fixed assets, specifically for the purchase of new machinery and equipment, and to meet crucial working capital requirements. The maximum repayment period for the loan is 8 years, which includes a generous moratorium period of up to 1 year.
The Debt Equity Ratio (DER) required for loans under this scheme up to ₹25,00,000/- is 3:1. Term loans and working capital loans are charged an interest rate of 10% per annum. A concessional rate of interest, 0.5% less than the normal rate, is charged for units promoted by Women, Scheduled Caste (SC), Scheduled Tribe (ST), or Differently Abled persons.
Collateral security in the form of immovable property is required, in addition to the mortgage/hypothecation of proposed fixed assets. The value of immovable property situated in Puducherry must be not less than the amount of the term loan sanctioned. For properties outside Puducherry, the value must be not less than 150% (land with building) or 200% (only land) of the loan amount. For units promoted by Women, SC, ST, or Differently Abled persons, the required collateral value is reduced to 50% of the loan amount.
- Disbursement
- Milestone Based
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
Applications for the Composite Loan Scheme are accepted online through the PIPDIC website. Once submitted, each application undergoes a thorough screening process by a dedicated committee within PIPDIC. This committee evaluates the eligibility criteria, the viability of the proposed project, the financial health of the enterprise, and the adequacy of the collateral offered. While the specific stages of internal review are not explicitly detailed, it typically involves a detailed financial assessment, technical appraisal (especially for machinery purchases), and credit evaluation. Shortlisted applicants may be contacted for further clarifications or a more in-depth discussion of their project and financials before a final decision on loan sanction is made. The process aims to identify deserving micro-enterprises that can effectively utilize the financial assistance for their growth and contribute to the local economy.
Application Process
- 1
Register & Profile
Visit the PIPDIC website, register as a new customer, and create your profile with personal and company details.
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How to apply
Four steps from draft to disbursement — one action each.
- 1
Draft your application
Answer the form inside the grant tracker — AI drafts each response using your past answers, so you're not starting from a blank page.
- 2
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.
- 3
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 4
Submit on the official portal
Use the official application link and verify all details before final submission.
- 5
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 loan amount available under this scheme?
Under the Scheme for Cottage and Village Industries (Composite Loan Scheme), eligible micro-enterprise units can receive financial assistance of up to ₹25,00,000/- (Rupees Twenty-Five Lakhs Only) per unit. This composite loan can be utilized for both term loan and/or working capital requirements.
Who is eligible to apply for this composite loan scheme?
To be eligible, the promoter must be a resident of Puducherry. Additionally, the applicant's enterprise must belong to the Artisans Village and Cottage Industries sector, Small Industries in the tiny sector, or be classified as a Micro Enterprise project. The loan purpose must explicitly be for acquiring fixed assets and/or meeting working capital needs.
What can the loan proceeds be used for?
The loan proceeds can be utilized for acquiring fixed assets, specifically for the purchase of new machinery and equipment. A significant portion of the loan can also be allocated to meet the working capital requirements of the enterprise, ensuring smooth day-to-day operations and business growth.
What are the repayment terms and interest rates for the loan?
The maximum repayment period for the composite loan is 8 years (96 months), which includes a generous moratorium period of up to 1 year (12 months). The standard interest rate charged is 10% per annum. However, a concessional rate of 0.5% less than the normal rate is offered to units promoted by Women, Scheduled Caste (SC), Scheduled Tribe (ST), or Differently Abled persons.
Are there any collateral requirements for this loan?
Yes, collateral security is required. Applicants must offer immovable property as collateral, in addition to the mortgage/hypothecation of the proposed fixed assets. The value of immovable property situated in Puducherry must be at least 100% of the loan amount, while properties outside Puducherry require higher coverage (150% for land with building, 200% for land only). For units promoted by Women, SC, ST, or Differently Abled persons, the collateral requirement for immovable property is significantly reduced to 50% of the loan amount.
What is the application fee for this scheme?
The application fee is ₹100/- for loans up to ₹25,00,000/-. This fee is payable during the online application process after submitting the necessary documents.
Sources
Data on this page is compiled from official program and provider references.
