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Venture Capital Assistance Scheme: Explained

calendar06 May, 2022
timeReading Time: 3 Minutes
Venture Capital Assistance Scheme

The Venture Capital Assistance scheme is launched by the Small Farmer’s Agri-Business Consortium. The scheme works for the betterment of farmer-entrepreneur to evolve their agri-based business. VCA also aims to provide credit assistance to the qualifying projects of the farmers to fulfill their funding needs for the project’s implementation. In this write-up, we shall discuss the Venture Capital Assistance Scheme in detail.

Underlying Objectives of the Venture Capital Assistance scheme

The key objectives of the VCA are listed below:

  • To aid the entrepreneurs in establishing an agri-based venture which has already secured the necessary bank’s approval.
  • To aid farmers, agriculture graduates, and producer groups in taking part in the value chain via the Project Development Facility.
  • To improve the preceding stages of central and state SFAC.
  • To advocate training and approaches to agri-entrepreneurs for establishing agribusiness projects.
  • To facilitate market access to the producers for augmenting rural income and job threshold.
  • To assist the backward linkages with producers.

Salient Features of the Venture Capital Assistance scheme

The salient features of the VCA scheme are as follows:

  • The venture capital shall be available for the projects that already have the bank’s approval for the project funding.
  • The scheme mandates capital acquirers to repay the credit (venture capital) to the SFAC within the given timeline.
  • The venture capital shall be provided to agri-based projects in the form of soft loans.

Eligibility Criteria underpinned by the Scheme

The followings are eligible to secure the loan from the SFAC

  • Individual
  • Producer group
  • Farmers
  • Partnership company
  • Self Help Groups
  • Agripreneuers
  • Company
  • Agri-export zones units
  • Agricultural graduates

Loan threshold available under the Venture Capital Assistance scheme

The loan threshold shall vary in accordance with the project cost. The maximum and minimum loan threshold is mentioned below

  • The loan threshold shall be 26 percent of the promoter’s equity.
  • The maximum loan threshold provided shall be Rs.50 lakhs.

The loan threshold for projects proposed to become operational in the north-eastern regions is mentioned below:

  • The loan threshold shall be 40 percent of the promoter’s equity.
  • The maximum loan threshold granted shall be Rs.50 lakhs.

Terms and Conditions of the VCA scheme

The credit seekers have to meet the following conditions to secure loans under the scheme

  • The project should belong to the Agri sector or any sector relating to agriculture practices.
  • The project must ensure a guaranteed market for the producer or farmers.
  • The project must have banks or financial institutions [1] ‘approval for the grant of loan to the project.
  • The project should aim for farmers’ encouragement and provide assistance in producing high-value crops to maximize farmers’ income.

High Venture Capital

The Executive Committee under SFAC has the authority to validate the project for the venture capital’s recommendation provided the given norms are met:

  • If the overall project’s valuation is not more than ten crores rupees.
  • If the projects are proposed to become operational in hilly states which have been declared as backward regions by the scheme like the planning commission backward regions grant fund scheme.
  • If the approval authority sanctions the provision for high venture capital to a max. of three crores rupees.

Documents required to be registered under the Venture Capital Assistance scheme

The following are the documents that have to be attached with the application form:

  • Promoter’s request letter
  • Sanction letter of the approval authority
  • Banks’ approved appraisal
  • Accounts’ current statement
  • partnership deed (in case of partnership firm)
  • Equity certificate
  • Farmer’s backward linkage backed by the agreement
  • Promoter’s Affidavit confirming that VCA has not been accessed in the past
  • CA certificate (in case of unsecured loans secured by the promoter)
  • Copy relating to the current bank inspection report
  • Bank’s confirmation confirming that they shall not furnish collateral security before securing the SFAC approval
  • Justification of margin on working capital

Application Procedure for registering under the VCA scheme

The following online procedure would help secure applicant registration under the VCA scheme:

Step 1: Visit the SFAC portal

Step 2: On the homepage, tap on the option called “Venture Capital Assistance Scheme (VCA)” followed by Online submission of venture capital assistance scheme Form“.

Step 4: On the subsequent window, tap on the link stating Apply for New venture capital assistance scheme Application

Step 5: Next, tap on the “Start Filing Application Form” tab. This will direct the portal to open the e-form.

Step 6: Include the following particulars in the e-form

  • Bank details
  • Name and Address of controlling office of the branch
  • Status of Accounts
  • Cost of projects
  • Name of the consultant

Step 7: Next, upload the requested documentation

Step 8: Tap on the “Next” tab to complete the process.

Sanction of Loan

Upon application’s submission, the concerned bank or financial institution conducts the inspection procedure and accordingly forwards the funding request to the SFAC if all conditions are met. The SFAC shall process the loan amount for eligible projects.


The Venture Capital Assistance scheme is a promising farmer-entrepreneur upliftment scheme that provides necessary funding to the qualifying projects. GOI launched this scheme to bring innovative agri-based projects into action.

Read our Article:Export Promotion Schemes in India: Explained

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