Central Govt Business & Entrepreneurship

Venture Capital Fund for Scheduled Castes

Scheduled Caste entrepreneurs can access debt or equity funding of ₹10 lakh to ₹15 crore at a concessional interest rate of just 4% per year to set up or expand a company in manufacturing, services, or tech. SC women and disabled entrepreneurs get an even lower rate of 3.75%. Apply online at foa.vcfsc.in.

Department of Social Justice & Empowerment For: Individual Official Source

About This Scheme

Full official description

The scheme "Venture Capital Fund for Scheduled Castes" was launched by the Ministry of Social Justice and Empowerment, Ministry of Social Justice and Empowerment, Government of India. The scheme aims to promote entrepreneurship among the Scheduled Caste population by providing concessional finance to them, focusing on innovation and growth technologies. The scheme provides financial assistance ranging from ₹10,00,000/- to ₹15,00,00,000/-, which can be provided through debt/convertible instruments at 4% per annum (3.75% per annum for Scheduled Caste women/disabled entrepreneurs) or through equity investment with a return of 8% per annum or valuation, whichever is higher at exit. The applications for this scheme are accepted online.

Benefits

Concessional loans at 4% per annum (3.75% for SC women/disabled entrepreneurs)
Equity funding option: 8% per annum return at exit, or valuation-based return, whichever is higher
Funding range: ₹10 lakh minimum to ₹15 crore maximum
For assistance up to ₹5 crore: up to 75% of project cost funded
For assistance above ₹5 crore: up to 50% of project cost funded
Maximum loan tenure of 10 years
TBI-incubated innovative startups can receive up to ₹10 lakh/year for 3 years for operational costs

Who Can Apply (Eligibility)

The company must be a Private Limited or Public Limited company (LLPs and sole proprietorships are not directly eligible)
At least 51% shareholding must be held by Scheduled Caste entrepreneurs with management control
For assistance up to ₹50 lakh: SC majority shareholding for at least 6 months prior
For assistance above ₹50 lakh: SC majority shareholding for at least 12 months prior
Manufacturing, services, and allied sectors including startups are eligible
SC entrepreneurs with tech-based innovative projects incubated at IITs/NITs or holding patents can also apply
Caste certificate (SC documentary proof) is mandatory

Exclusions

Entrepreneurs belonging to Scheduled Tribes, Other Backward Classes, or the General category are not eligible under this fund.
Proprietary Firm or Partnership Firm or One Person Company (OPC) or Limited Liability Partnership (LLP) or any other establishment incorporated under any law in force are not eligible for direct financing.

How to Apply

Online

Registration

Navigate to the official link for online application. Click on "Create an Account". You will be taken to the registration page. Fill in all the mandatory fields and register. *If required, verify your Email ID and Mobile Number via OTP. *If you are prompted to create a password, ensure the password meets security requirements.

Application

Step 1: Navigate to the official link for online application. Use the credentials you created during registration to log in. Navigate to the online form of the scheme you intend to apply for. Step 2: In the form, fill in all the mandatory fields and upload all the mandatory documents in the specified format and size. Carefully review all the information provided and the documents uploaded. Make any necessary corrections. Step 3: Acknowledge and agree to the terms and conditions, declaration, and privacy policy (if any) by ticking the designated checkbox. Click "Submit" to submit your application. You'll receive a confirmation message. *The online application shall remain valid for a period of 6 months.

Post-Application Processes

Step 1:**** Screening Committee Review (Preliminary Stage) The proposals shall be put up before the Screening Committee on a first-come, first-served basis for an initial analysis. Step 2:**** Detailed Appraisal and Due Diligence A site visit of the project site shall be carried out by officials or authorized representatives of IFCI Venture Capital Funds Limited. Step 3:**** Investment Committee Review (Final Stage)

The detailed proposal prepared by the Asset Management Company (AMC) shall be considered by the Investment Committee for final sanction.
The Investment Committee determines the quantum of assistance and may defer, reject, or sanction the proposal based on its merit.

Step 4:**** Issuance of Letter of Intent and Legal Documentation

Following approval/sanction from the Investment Committee, a Letter of Intent (LOI) and term sheet, along with a legal checklist, shall be issued to the Company.
After the Company accepts the LOI and term sheet, the necessary legal documentations shall be prepared and executed by the Asset Management Company (AMC).

Step 5:**** Valuation and Title Search Initiation

Post acceptance of the Letter of Intent (LOI) and term sheet, the assignment for a Valuer and Lawyer shall be initiated for conducting valuation and title search of the property(ies).
The fees for this first valuation and title search are borne by the Venture Capital Fund for Scheduled Castes (VCF-SC).

Disbursement of Funds

Disbursement shall be made as per the terms and conditions of the sanction, once the above process is complete.
The disbursement shall be made to the companies post execution of the complete legal documents at the office of IFCI Venture Capital Funds Limited situated in Delhi.
The disbursement is made in tranches and is subject to the successful completion of the sanctioned terms, pre-disbursement conditions, Valuation, and Title Search Report (TSR).

Frequently Asked Questions

What specific type of legal entity must my business be incorporated as in order to be considered eligible for the financial assistance offered under this fund?

Only a Private Limited Company or a Public Limited Company is eligible for receiving finance under this fund.

If my company is applying for financial assistance exceeding ₹50,00,000/-, how long must the mandated minimum 51% Scheduled Caste shareholding have been continuously in place?

For assistance exceeding ₹50,00,000/-, the company must have maintained at least 51% shareholding by Scheduled Caste entrepreneurs with management control for the preceding 12 months.

If the project involves securing a Government subsidy from a central or state department, which mandatory document must be submitted as proof of this arrangement?

If a Government subsidy is available, the sanction letter from the relevant department of the Government of India needs to be submitted along with the proposal.

If my establishment is currently structured as a Proprietorship Firm or a Limited Liability Partnership, can I still apply directly for the financial assistance available?

No, Proprietary Firms or Limited Liability Partnerships (LLP) are not eligible for direct financing. They must convert into a Private Limited or Public Limited Company prior to receiving assistance under the fund.

What crucial documentary proof related to the entrepreneur’s background must be mandatorily provided when submitting the initial proposal application for the fund?

The entrepreneur must submit documentary proofs of belonging to the Scheduled Caste category at the specific time of submitting the proposals. E-documents (electronic documents) are also accepted.

Is this specific pool of concessional finance exclusively intended for entrepreneurs belonging to the Scheduled Castes, or are other social categories also eligible?

Entrepreneurs belonging only to the Scheduled Castes are eligible for assistance under this fund. Entrepreneurs from Scheduled Tribes, Other Backward Classes, or the General category are not eligible.

Once financial assistance has been sanctioned and disbursed to my company, is there a mandatory requirement regarding the continuity of the Scheduled Caste shareholding structure?

Yes, the aggregate shareholding of Scheduled Caste shareholders must be maintained at a minimum of 51% of the total shareholding of the company throughout the entire period the assistance remains in the company.

What are the special ownership and managerial requirements for a company to be officially designated and considered as being owned by a Scheduled Caste woman entrepreneur?

The Scheduled Caste woman entrepreneur should hold at least 51% of the shareholding in the company. Additionally, she must also serve as the Managing Director of the Company.

If I have partners who are not from the target population, what is the minimum aggregate shareholding requirement that Scheduled Caste promoters must collectively maintain in the company?

The aggregate shareholding of Scheduled Caste shareholders must be at least 51% of the total shareholding of the company. This group must also maintain management control of the company.

What criteria apply if I have a technology-oriented innovative project that is currently receiving support from various recognized national incubation centers?

The innovative project must be supported by incubation centers at Indian Institutes of Technology (IITs), National Institutes of Technology (NITs), Premier Business Schools, or Universities. The project needs to show good potential for commercialization and must be at the implementation stage.

What are the eligible business sectors and mandatory nature of the project being set up to qualify for financing under this scheme?

The projects or units must be set up in the manufacturing, services, and allied sectors, including start-ups. It is mandatory that the project ensures the creation of assets out of the funds deployed in the unit.

If I am a disabled entrepreneur seeking financial assistance, which specific government guidelines will be utilized to determine my official qualification status as disabled?

In the case of disabled entrepreneurs, the qualification guidelines issued by the Department of Divyang Welfare will be followed to determine if they qualify as disabled for the purpose of the fund.

Can a newly incorporated Private or Public Limited Company, which succeeded a Proprietary Firm or Limited Liability Partnership, qualify for funding?

Yes, a new company can be eligible if it is a successor entity of a Proprietary Firm, Partnership Firm, One Person Company (OPC), or Limited Liability Partnership. The predecessor entity must have had a sound business model, be in operation for over 6 or 12 months, and have had at least 51% Scheduled Caste shareholding with management control.

For companies seeking assistance up to ₹50,00,000/-, what is the mandatory minimum period for which the Scheduled Caste entrepreneurs must have maintained 51% shareholding with management control?

For assistance up to ₹50,00,000/-, the company must have had at least 51% shareholding by Scheduled Caste entrepreneurs with management control for the past 6 months.

Ready to apply?

Visit the official government portal to apply for this scheme.

Apply on myScheme.gov.in

Documents Required

Caste Certificate.
Detailed Project Report (To Be Prepared And Submitted By The Company/Its Promoters).
Documentary Proofs / Certificate From the Incubation Centers/corporates (For Technology Oriented Innovative Projects With Support Of Incubation Centers).
Documents Regarding Patent/copyrights in the Name of the SC Entrepreneur (For Technology Oriented Innovative Projects Without Support Of Incubation Centers).
Sanction Letter (For Projects Sanctioned By Departments Of Government Of India Or In Cases Where Government Subsidy Is Available).