Coir Udyami Yojana (CUY)

What is Coir Udyami Yojana?

Coir Udyami Yojana (CUY) is a Central Sector, credit-linked subsidy scheme run by the Coir Board, a statutory body under the Ministry of Micro, Small and Medium Enterprises. Coir Udyami Yojana helps entrepreneurs set up coir processing and coir-product manufacturing units by combining a bank loan with a government capital subsidy, so that new units in the coir sector can be established with a small own contribution.

According to the scheme guidelines, Coir Udyami Yojana supports coir units with a project cost of up to Rs 10 lakh plus one cycle of working capital. The working capital component is capped at 25% of the project cost. The scheme is aimed at expanding coir production, generating rural and semi-urban employment, and adding value to coconut husk. A raw material that is abundant in coconut-growing states such as Kerala, Tamil Nadu, Karnataka, Andhra Pradesh and Odisha.

Key features

• Central Sector scheme; funding and subsidy come from the Coir Board / MSME.
• Credit-linked. The project must be financed by a bank.
• Applicable across India, not restricted to any single state.
• Covers both new coir units and the mechanisation of coir production.

How is the funding split under Coir Udyami Yojana?

The cost of the coir unit is shared in a fixed ratio:

The 40% subsidy is the government's contribution and is released through the financing bank, typically as a back-ended subsidy after the unit is commissioned and inspected. The 55% bank loan is sanctioned by the lending branch on normal terms, and the entrepreneur brings in the remaining 5%. Because the subsidy is credit-linked, no subsidy is released unless a bank first sanctions and disburses the loan.

Who is eligible for Coir Udyami Yojana?

You can apply if you fall into any of these categories:

• Individuals setting up a coir unit.
• Companies in the coir sector.
• Self Help Groups (SHGs).
• Non-Governmental Organisations (NGOs).
• Institutions registered under the Societies Registration Act, 1860.
• Production co-operative societies.
• Joint Liability Groups (JLGs).
• Charitable trusts.

The common condition is that the proposed activity must be a coir or coir-product unit and the project must be bankable. Only one subsidy is admissible per eligible unit.

You cannot apply if:

• Your project is not in the coir sector. The scheme is exclusive to coir production and coir-product manufacturing.
• Your project cost exceeds Rs 10 lakh plus the permitted working-capital cycle; larger projects are not eligible under this scheme.
• You cannot arrange bank finance; without a sanctioned loan the subsidy cannot be released, because the scheme is credit-linked.
• You are seeking a second subsidy for a unit that has already availed assistance under this or an overlapping scheme.

Because the benefit is tied to setting up an enterprise, an individual looking for a personal cash grant unrelated to a coir unit is not the intended beneficiary — the assistance is for establishing or mechanising a coir business.

What documents are required for Coir Udyami Yojana?

How to apply for Coir Udyami Yojana

1. Prepare a project report for your coir unit showing the total project cost (up to Rs 10 lakh) and the working-capital requirement.
2. Collect the application form from a Coir Board office, a District Industries Centre (DIC), a Coir Project Office, a Panchayati Raj institution, or an approved nodal agency of the Board.
3. Submit the completed application directly to a Coir Board field office or through the DIC, along with the project report and supporting documents.
4. Loan appraisal by the bank. The Coir Board forwards the case to the financing bank, which appraises and sanctions the term loan of 55%.
5. Set up the unit and claim the subsidy: once the loan is disbursed and the unit is established, the 40% government subsidy is released through the bank after verification.

Where to get help

Coir Udyami Yojana is administered through the Coir Board's regional and field offices and the network of District Industries Centres. Applicants should approach the nearest Coir Board office or DIC for the current application form, the list of empanelled banks and the latest guidelines. Details of Coir Board offices and financial-assistance schemes are published on the Coir Board portal at coirboard.gov.in.

Because the scheme is credit-linked and processed jointly with a bank, keep your project report realistic and bankable. An unviable project report is the most common reason a coir-unit proposal is rejected at the loan-appraisal stage.