Margin Money Grant Scheme

What is the Margin Money Grant Scheme in Assam?

Margin Money Grant Scheme is a state incentive of the Industries and Commerce Department, Government of Assam, listed by the Commissionerate of Industries and Commerce and delivered through District Industries and Commerce Centres. The scheme attacks a specific and very common blockage in small-enterprise finance in Assam: the promoter's margin.

When a bank appraises a project, it does not lend the whole cost. It fixes a margin, the share the promoter must bring from their own pocket, and lends the rest as a term loan. For a first-generation entrepreneur in a district town, that margin is often the entire obstacle. The project is viable, the bank is willing, and the file stops because the promoter cannot put up their share. Margin Money Grant Scheme steps into exactly that gap.

According to the scheme write-up published by the District Industries and Commerce Centre, the objective is to provide financial assistance to entrepreneurs by way of margin money so as to enable them to run their enterprises by availing financial assistance from banks and financial institutions.

How much does the Margin Money Grant Scheme give?

The published nature of the incentive is unusually generous in structure:

• Margin money assistance is 100 per cent of the margin contributed by the entrepreneur against the total term loan sanctioned by the bank or financial institution.
• The maximum ceiling is Rs 25 lakh to each running unit.

Two points follow from that wording and are worth reading carefully.

First, the grant is proportionate to the margin, not to the project cost. If a bank fixes a 25 per cent margin on a Rs 40 lakh project, the margin is Rs 10 lakh and that is the reference figure, not Rs 40 lakh. A larger project with a smaller margin requirement therefore draws less, not more.

Second, the ceiling applies per running unit. The phrase matters: the scheme is framed around an enterprise that is actually operating, which is why verification of the unit on the ground is part of the process.

Margin money assistance under this scheme is a grant, not a loan. The bank's term loan remains repayable on its own terms; the state does not take it over. What the state does is put back the promoter's own contribution.

Who is eligible for the Margin Money Grant Scheme?

You can apply if:

• You are an entrepreneur in Assam running or setting up an industrial or business unit in the state.
• A bank or financial institution has sanctioned a term loan for the project, and the sanction letter fixes a margin.
• You have actually contributed the margin, and can prove it with a bank statement, deposit receipt or bank certificate.
• Your unit is registered with the District Industries and Commerce Centre or under Udyam, and holds a valid trade licence.
• Your unit is running, since the ceiling is expressed per running unit.

You are not eligible and cannot apply if:

• You have no sanctioned term loan. A grant computed on margin cannot exist without a bank sanction that fixes that margin.
• You have not put in your own margin. The scheme reimburses a contribution actually made, not one merely promised.
• Your unit exists only on paper and cannot be verified in operation at the declared address.
• You are seeking a personal or household benefit rather than support for an enterprise. Margin Money Grant Scheme is an enterprise incentive; individuals without a unit should look at SVAYEM seed capital or PMEGP instead.
• You have already drawn Rs 25 lakh for the same unit, which is the ceiling.
• Your activity falls in a prohibited or negative-list trade under the department's rules.

What documents are required?

How to apply for the Margin Money Grant Scheme

1. Prepare a bankable project report for the unit, showing the total project cost, the term loan sought and the margin you will contribute.
2. Get the term loan sanctioned by a bank or financial institution, and obtain the sanction letter setting out the margin requirement.
3. Deposit your margin contribution into the project account and collect documentary proof. A bank certificate is the cleanest form of evidence.
4. Visit the District Industries and Commerce Centre of your district, ask for the current Margin Money Grant Scheme application format and check whether applications are open for the financial year.
5. Submit the completed application with the sanction letter, proof of margin contributed, project report, unit registration, trade licence, residence proof and bank details. Take a dated acknowledgement.
6. Host the physical verification. An officer of the District Industries and Commerce Centre inspects the unit, confirms it is running and verifies the margin against the bank records.
7. Await the district committee's selection. Applications are placed before the district-level selection process, and beneficiaries are selected within the annual budget allocation.
8. Receive the grant in the unit's bank account. Release is by bank transfer; no cash is paid out.

How do I check my application status?

Follow up at the District Industries and Commerce Centre where the application was filed. The General Manager's office holds the file and can say whether it is at scrutiny, physical verification, selection or release stage.

The Commissionerate of Industries and Commerce site also carries Know Your Status and Beneficiaries links under its information and services section, which are useful once a year's selection list has been finalised. Note that the Commissionerate's own Margin Money Grant Scheme page is currently a listing page without downloadable guidelines, so the district office remains the authoritative local source for the current year's format and cut-off.

Why margin money applications get rejected

• No term loan sanction, or a sanction that has lapsed before the grant is processed.
• Margin not actually paid in, or paid from a source the bank cannot certify.
• Unit not found operating at physical verification.
• Trade licence or unit registration missing or expired.
• Budget exhausted for the financial year, in which case the application is usually carried to the next round rather than rejected on merit.
• Double claim for the same margin under another credit-linked scheme such as PMEGP, which subsidises project cost directly.

The last point causes real confusion. Under PMEGP, the bank sanctions 95 per cent of a project costing up to Rs 50 lakh in manufacturing or Rs 20 lakh in services, the promoter brings 5 per cent, and the subsidy is 25 per cent in urban and 35 per cent in rural areas. That is a subsidy on project cost. The Assam Margin Money Grant Scheme instead reimburses the promoter's margin against a term loan, up to Rs 25 lakh. Applying under both for the same expenditure invites rejection.

Help and grievance redressal

• General Manager, District Industries and Commerce Centre of your district — the operative office for application, verification and status.
• Commissionerate of Industries and Commerce, Government of Assam at industriescom.assam.gov.in.
• Assam Single Window / Ease of Doing Business helpline: 1800 345 3579, email eodb-assam@assam.gov.in.

The grant is free to apply for and is released only by bank transfer to the unit's account. Any demand for a commission to "get the margin money sanctioned" should be reported in writing to the Deputy Commissioner of the district.