Margin Money Grant to Nano Units

What is the Margin Money Grant to Nano Units scheme?

Margin Money Grant to Nano Units is a loan-linked capital subsidy run by the Directorate of Industries and Commerce, Government of Kerala. According to the directorate's scheme page, it provides financial assistance to new nano enterprises in the manufacturing, food processing, job work and service sectors where there is value addition. A nano unit here means a very small enterprise whose total project cost does not exceed Rs 10 lakh.

The gap the scheme fills is specific. A person who wants to start a small bakery unit, a tailoring workshop, a spice grinding unit or a small fabrication shop can usually get a bank to lend part of the money. What stops them is the margin, the share of the project cost the bank will not fund and expects the promoter to bring. For someone starting out, finding Rs 3 lakh of own money is often impossible even when the business itself is sound. Margin Money Grant to Nano Units supplies that margin as a government grant, so the bank's loan can actually be drawn.

Key features

• Grant, not a loan. The margin money grant is not repaid to the Industries Department.
• Loan-linked. The bank loan must be at least 40 percent of project cost.
• Project cost ceiling of Rs 10 lakh.
• Two rates to 30 percent for general category and 40 percent for special category.
• 30 percent of beneficiaries shall be women entrepreneurs, as stated in the scheme guidelines.

How much grant does the nano units scheme give?

The assistance depends on which category the applicant falls into.

Special category covers women, youth aged 18 to 40 years, differently abled persons, ex-servicemen and SC/ST applicants. The directorate gives priority to these groups in selection as well as the higher grant rate.

Two worked examples make the arithmetic concrete. A general category applicant with a project cost of Rs 8 lakh brings Rs 2.4 lakh of own money, takes a bank loan of at least Rs 3.2 lakh, and receives a grant of Rs 2.4 lakh. A woman applicant with the same Rs 8 lakh project brings Rs 1.6 lakh of own money, takes a bank loan of at least Rs 3.2 lakh, and receives a grant of Rs 3.2 lakh. At the full Rs 10 lakh project cost the general grant works out to Rs 3 lakh, exactly at the ceiling, and the special category grant to Rs 4 lakh, also exactly at the ceiling, which is why the Rs 10 lakh project cost limit and the grant caps line up neatly.

Who is eligible for the Margin Money Grant to Nano Units?

You can apply if:

• You are setting up a new nano proprietary enterprise in Kerala.
• The total project cost is Rs 10 lakh or less.
• The activity is in manufacturing, food processing, job work, or a service with value addition.
• A bank or financial institution has sanctioned a term loan of at least 40 percent of project cost.
• You can bring the minimum own contribution to 30 percent general, 20 percent special category.
• You hold or can obtain Udyam Registration for the unit.

You cannot apply if:

• Your project cost exceeds Rs 10 lakh. Such projects are not eligible here and should go to the Entrepreneur Support Scheme or PMEGP.
• The unit is an existing running business seeking expansion or modernisation. The scheme is for new units only.
• The business is pure trading or resale with no value addition: buying and selling without processing does not qualify.
• The unit is a large industry or is outside the MSME definition.
• No bank loan has been sanctioned. Because the scheme is loan-linked, an entirely self-financed project has no margin for the grant to cover and is not eligible.
• The unit is located outside Kerala, even if the promoter is a Kerala resident.
• You are seeking a personal loan or household assistance rather than setting up an enterprise. Individuals cannot apply for a personal benefit under this scheme.

What documents are required for the nano units margin money grant?

Take original documents to the Taluk Industries Office. The Assistant District Industries Officer verifies originals against the uploaded copies.

How to apply for the Margin Money Grant to Nano Units

1. Decide the activity and prepare a detailed project report. Keep the total project cost at Rs 10 lakh or below, and set out land or rent, building work, machinery, working capital and pre-operative expenses line by line.
2. Approach a bank for the term loan. Ask for a sanction of at least 40 percent of project cost, and tell the branch you are claiming the Kerala Margin Money Grant to Nano Units so the sanction letter records the margin correctly.
3. Obtain Udyam Registration for the enterprise on the Government of India Udyam portal. It is free and takes a few minutes.
4. Arrange the beneficiary contribution — a minimum of 30 percent of project cost for general category, 20 percent for special category, and keep the bank statement that evidences it.
5. Register and apply online at schemes.industry.kerala.gov.in/public/index.php/schemes. Choose Margin Money Grant to Nano Units, fill in promoter, project and financial details, and upload the project report, quotations, property documents, bank sanction letter and category certificate.
6. Submit the physical file to the Assistant District Industries Officer at your Taluk Industries Office, along with the bank's recommendation letter and the supporting documents.
7. Attend the inspection. A departmental officer visits the site to verify the premises, the machinery installed and the investment made.
8. Receive the grant. On sanction, the margin money grant is released, ordinarily to the loan account or the enterprise account as specified in the sanction order. Keep the sanction order safely, it is needed for later scheme applications.

How do I check my nano units grant application status?

1. Log in at schemes.industry.kerala.gov.in with your registered credentials.
2. Open the applications list and find the file number issued at submission.
3. Track the stage, submitted, Taluk Industries Office verification, inspection, district-level sanction, release.
4. For a stalled file, contact the Assistant District Industries Officer at the Taluk Industries Office first, then the District Industries Centre, and finally the Directorate on 0471-2302722.

Why do nano units margin money grant applications get rejected?

• Project cost above Rs 10 lakh. This is a hard ceiling, and a project report that crosses it is returned rather than scaled down.
• No bank sanction letter, or a sanctioned loan below 40 percent of project cost.
• Own contribution not actually brought in. A promised contribution that never appears in the bank statement fails at inspection.
• Trading activity dressed up as manufacturing. If the inspecting officer finds goods being bought and resold without processing, the case is not eligible.
• Existing unit filed as a new one. Machinery already installed and in production before the application usually indicates an existing unit.
• Quotations that do not match installed machinery at inspection.
• Special category claimed without a certificate. The 40 percent rate needs documentary proof; without it the file is processed at 30 percent.
• Premises documents missing, no title deed and no registered rent agreement.

What are the key dates for this scheme?

The Directorate of Industries and Commerce has not published a fixed annual closing date for the Margin Money Grant to Nano Units. Applications are accepted through the year and sanctioned against the financial year's budget allocation. Because sanctions stop when the district allocation is exhausted, filing in the first half of the financial year is generally safer than filing in February or March. Applicants should also note that the bank sanction letter has its own validity, and a stale sanction may have to be revalidated before the grant is released.

Where do I get help or raise a grievance?

• Taluk Industries Office, the Assistant District Industries Officer is the designated receiving officer and the first point of help.
• District Industries Centre of your district for escalation.
• Directorate of Industries and Commerce, Vikas Bhavan, Thiruvananthapuram, Kerala 695033. Phone 0471-2302722, email industriesdirectorate@gmail.com.

Applying for the Margin Money Grant to Nano Units is free. No agent can guarantee a sanction, and no departmental officer will ask for money to process the file. Any such demand should be reported to the District Industries Centre in writing.