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.

How to check your application status

Coir Udyami Yojana has no centralised online tracking portal or application ID system published for applicants, so status checks are done directly with the office that is processing the file, not through a self-service dashboard.

1. Identify where the file currently sits. After submission, the application moves through two custodians in sequence: first the Coir Board field office or DIC that received it, then the financing bank once the case is forwarded for loan appraisal. Ask which of the two currently holds the file before you follow up, since each stage has a different point of contact.
2. Follow up with the Coir Board field office or DIC first if the loan has not yet been sanctioned. Carry your acknowledgement or application reference (if one was issued at submission) and ask for the current stage: under scrutiny, forwarded to bank, or returned for corrections.
3. Follow up with the financing bank once the Coir Board has forwarded the case. The bank branch handling the appraisal can confirm whether the loan is sanctioned, disbursed, or still pending documentation or a site visit.
4. Ask about subsidy release separately from loan sanction. Because the 40% subsidy is back-ended and released only after the unit is set up and verified, a sanctioned loan does not mean the subsidy has been claimed or credited. Confirm with the bank whether the subsidy claim has been filed with the Coir Board and whether the post-installation verification has been completed.
5. Use the Coir Board portal for contact details, not tracking. coirboard.gov.in lists the regional and field office addresses and phone numbers; use it to find the correct office rather than expecting an online status page, since none is published for this scheme.
6. Keep a copy of every document you submit and the date of submission. In the absence of a digital tracking number, your own submission date and the office's file/diary number (if given) are what an office will ask for when you call to check progress.

Because two different institutions (the Coir Board office and the bank) both hold a piece of the file at different times, delays are common when applicants only follow up with one side. Checking with both, and asking specifically which stage the file is at, gets a clearer answer than a general status inquiry.

Common reasons for rejection

• Project report is not bankable. Banks appraise the loan portion independently, and a project report with unrealistic sales projections, missing cost breakups, or no clear market for the coir product is the single most common reason a case stalls or is declined at the appraisal stage. The fix is to get the project report prepared with realistic, itemised costs for machinery, raw material and working capital, matched to a credible production and sales plan.
• Project cost exceeds the Rs 10 lakh ceiling (plus permitted working capital). Proposals that exceed the maximum admissible project cost, or where the working-capital component is more than 25% of the project cost, fall outside the scheme's design and get rejected on scope alone. The fix is to size the project within the ceiling, or apply under a different MSME credit scheme if the unit genuinely needs more capital.
• The activity is not a coir or coir-product unit. Coir Udyami Yojana funds only coir processing and coir-product manufacturing; a general handicraft, agro-processing, or unrelated small-business proposal submitted through a Coir Board office will not qualify. The fix is to confirm the proposed activity is squarely coir-based before applying, and to say so clearly in the project report.
• No sanctioned bank loan. Because the subsidy is credit-linked, a proposal that cannot secure the 55% bank loan, whether from weak creditworthiness, no collateral where the bank requires it, or an unconvincing project report, cannot draw the government subsidy either, regardless of how eligible the applicant otherwise is. The fix is to approach the bank early with complete documentation and be prepared to address the same viability concerns the Coir Board will raise.
• Missing or incomplete identity, address or entity-registration proof. For SHGs, societies, co-operatives, NGOs, JLGs or trusts applying as an institution, absent or outdated registration documents are a frequent cause of the application being sent back for resubmission rather than rejected outright, but this still delays or derails a case if not corrected promptly. The fix is to attach current registration proof for the applying entity alongside the promoters' individual identity documents.
• Applying for a unit that has already availed assistance. Only one subsidy is admissible per eligible unit; a second application for a unit that has already received Coir Board assistance, or overlapping assistance under another scheme, will be turned down. The fix is to check with the local Coir Board office whether the unit or promoter has any prior assistance on record before submitting a fresh application.
• No clear site or premises arrangement where required. Where land or premises documentation is asked for, an application without a firm site (owned, leased, or otherwise secured) for the coir unit can be held up at the appraisal stage since neither the bank nor the Coir Board can verify a unit that has no confirmed location. The fix is to finalise the site and carry proof of the arrangement before submission.