Scheme for Cottage and Village Industries (Composite Loan Scheme)

What is the Composite Loan Scheme for Cottage and Village Industries?

The Scheme for Cottage and Village Industries, usually called the Composite Loan Scheme, is a general lending scheme of the Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC) under the Department of Industries and Commerce, Government of Puducherry. According to the PIPDIC schemes page, the scheme extends financial assistance in the form of a term loan, a working capital loan, or both together, to new and existing micro enterprise projects.

PIPDIC. The Pondicherry Industrial Promotion Development and Investment Corporation Limited: was set up by the Government of Puducherry in 1974 with an authorised share capital of Rs 45 crore. PIPDIC works under the Department of Industries and Commerce and does two things: it develops industrial estates, growth centres and IT parks in the Union Territory, and it lends to entrepreneurs through a published set of loan schemes.

The word composite is the point of the scheme. A weaver, a potter, a coir worker or a small food processor in Puducherry typically needs two things at once: a machine, and enough cash to buy the first few months of raw material. Splitting those into a term loan file and a working capital file doubles the paperwork for a borrower who may be running the unit alone. The Composite Loan Scheme puts both into a single sanction from a single agency.

Core features

• Assistance up to Rs 25,00,000 per unit, covering fixed assets and working capital together.
• Money may be used for the purchase of new machinery or equipment and to meet the working capital requirement.
• Repayment of up to 8 years, including a moratorium of at most 1 year.
• Debt-equity ratio of 3:1 for a loan up to Rs 25,00,000.
• Interest of 10% per annum, with a 0.5% concession for women, SC, ST and differently abled promoters.

Who is eligible for the Composite Loan Scheme?

You can apply if:

• You are a resident of the Union Territory of Puducherry. PIPDIC states the residence condition for the promoter, not merely for the unit.
• Your enterprise belongs to one of these sectors:
• the artisan, village and cottage industries sector;
• small industries in the tiny sector;
• micro enterprise projects, whether new or existing.
• The loan is for fixed assets, working capital, or both.
• The cost of machinery stays within the ceiling of Rs 25,00,000 per unit.
• You can offer immovable property as collateral in addition to the mortgage or hypothecation of the assets being financed.

You cannot apply if:

• The promoter is not a resident of Puducherry.
• The unit is a medium or large scale industry. Those are financed under PIPDIC's general SSI and MSI scheme, whose ceiling runs far higher.
• The machinery cost exceeds Rs 25,00,000, which takes the project outside the composite loan structure altogether.
• You are a defaulter to PIPDIC, a bank or another financial institution.
• The proposed unit will operate outside Puducherry, Karaikal, Mahe or Yanam.

The scheme is not a grant and not a subsidy. Every rupee sanctioned is a loan carrying interest and a repayment schedule, and the assets financed are mortgaged or hypothecated to PIPDIC.

How much money does the scheme give?

A debt-equity ratio of 3:1 means the promoter is expected to bring in roughly one rupee of her own for every three rupees PIPDIC lends. On a Rs 20,00,000 project, that is about Rs 5,00,000 of promoter contribution.

What are the interest rate and financial norms?

PIPDIC publishes a single rate card that applies across its lending schemes:

Units promoted by women, Scheduled Caste, Scheduled Tribe or differently abled entrepreneurs get a concession of 0.5% below the normal rate.

The investigation fee is 0.50% of the term loan applied for, plus service tax, where the loan is up to Rs 25,00,000, and 0.75% plus service tax above that. Scheduled Caste and Scheduled Tribe entrepreneurs pay half the investigation fee.

The debt-equity ratio expected is 3:1 for a composite loan up to Rs 25,00,000.

Collateral security is required in the form of immovable property, over and above the mortgage or hypothecation of the assets being financed. Property inside the Union Territory of Puducherry must be worth at least the sanctioned loan amount. Property outside Puducherry must be worth at least 150% of the loan if it is land with a building, and at least 200% if it is bare land. For units promoted by women, SC, ST or differently abled persons the requirement is reduced to 50% of the loan amount. Valuation is done by chartered engineers and valuers on PIPDIC's approved panel, not by a valuer of the borrower's choosing.

What documents are required?

How to apply for the Composite Loan Scheme online

PIPDIC accepts applications only through its own portal at pipdic.in. There is no paper counter for fresh loan applications, and no agent is authorised to file on your behalf.

1. Open pipdic.in and click Login, then choose the New customer link. Enter a username, an email ID, a password and the captcha, and click Register.
2. Log in with the registered email ID. PIPDIC sends a one-time password to that email address; enter the OTP and click Login to reach the customer dashboard.
3. Open Edit Profile from the top right corner of the dashboard, complete every required field about yourself and the enterprise, and click Submit. An incomplete profile blocks the application form.
4. Click the Applications tab. A pop-up shows the checklist of general terms and conditions, the interest rate structure, the investigation fee and the collateral security norms. Read it, gather the listed papers, and click I Agree.
5. Choose the correct application form. PIPDIC publishes four forms; Up to 25 Lakhs, Above 25 Lakhs, Transport, and the Merit Loan Letter — and fill the multi-step form, completing every mandatory field.
6. Read the declaration, which covers the truth of the information, the absence of any unauthorised borrowing arrangement and consent to verification. Tick I agree to terms and click Submit.
7. Enter the bio-data of the promoter, partner or director on the screen that follows, and upload each KYC and supporting document using the Choose File button beside the field.
8. Pay the application fee, Rs 100 for a loan up to Rs 25,00,000 and Rs 200 for a loan above Rs 25,00,000. Online payment redirects you to a summary page before the debit.
9. Save or print the fee receipt generated after payment. Keep it, because it carries the reference PIPDIC uses when you call about the file.

How to check the status of a PIPDIC application

1. Log in to pipdic.in with the registered email ID and the OTP sent to it.
2. Click View My application on the dashboard.
3. Select the relevant loan application from the drop-down menu.

A freshly filed application shows as UNDER REVIEW. The status moves on as PIPDIC completes the technical appraisal, the site inspection and the valuation of the property offered as collateral. If the status has not changed for several weeks, call the corporation on 0413-2334361 quoting the application number on your fee receipt rather than filing a second application, since a duplicate file attracts a second application fee.

Why PIPDIC applications get rejected or delayed

• Profile not completed on the portal, so the application form never opens.

• Collateral property falls short of the prescribed value once PIPDIC's panel valuer files the report. A borrower who relies on a private valuation from outside the panel is the most common casualty here.

• Title defects: property that is jointly held without every co-owner joining the mortgage, or property with an unreleased earlier charge.

• Default with another lender. PIPDIC checks credit records, and an outstanding default against the promoter or a group concern stops the file.

• Missing or unreadable uploads of KYC and financial documents.

• Application fee unpaid. The file is not taken into appraisal until the Rs 100 or Rs 200 fee is received and the receipt generated.

• Activity outside Puducherry. PIPDIC finances units located in the Union Territory of Puducherry, covering the Puducherry, Karaikal, Mahe and Yanam regions.

• Machinery quotations exceed Rs 25,00,000, which breaches the scheme's own ceiling even if the total project cost looks modest.

• Residence of the promoter not proved. A unit registered in Puducherry with a promoter resident elsewhere does not satisfy the condition as written.

Key dates

The Composite Loan Scheme runs through the year with no notified application window and no closing date. PIPDIC keeps the online form live continuously. Where a borrower is also claiming a subsidy from the District Industries Centre or a central scheme such as PMEGP, those schemes have their own calendars, and the loan sanction letter from PIPDIC is usually the document those schemes want first.

Whom to contact for help or a grievance

• Managing Director, PIPDIC, No. 60, Romain Rolland Street, Puducherry 605001 to phone 0413-2334361, email info@pipdic.com.
• General Manager (Administration), mobile 9894653835.
• Online grievance form at pipdic.in/grievance_form, which is the route that creates a written record.
• PIPDIC also holds virtual open house hearings for public grievances, notified on the portal.
• Department of Industries and Commerce, Government of Puducherry, is the administrative department above PIPDIC if a grievance is not settled by the corporation.

Filing an application on pipdic.in costs only the notified application fee. No official or intermediary is authorised to collect anything else for processing a file, and PIPDIC never asks for the OTP sent to your registered email.