Scheme for Marketing Organisations

What is the PIPDIC Scheme for Marketing Organisations?

Scheme for Marketing Organisations is one of the specific schemes of the Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC), the Government of Puducherry undertaking set up in 1974 to promote the union territory's industrial development and to finance its entrepreneurs. It sits under PIPDIC's Scheme for Marketing activities, which has two limbs. This one for marketing organisations, and a second for purchase of mobile sales vans.

The scheme addresses a gap that Puducherry's industrial policy has long recognised. The union territory has a substantial base of village and small industries, handicrafts and cottage producers, but production and retailing are different businesses requiring different skills and different capital. A coir unit or a handicrafts workshop cannot also finance and staff a showroom. PIPDIC therefore finances the marketing organisation, the entity that runs the outlet; rather than expecting the producer to do it.

According to PIPDIC's published schemes of assistance:

• Eligible borrowers: individuals, partnership concerns, and private and public limited companies experienced in marketing village and small industries (VSI) products; and all Khadi and Village Industries (KVI) institutions, whose proposals are to be supported by KVIC under its interest subsidy scheme.
• Purpose: for setting up new sales outlets or undertaking renovation or expansion of existing outlets marketing VSI products.
• Cost of project: not to exceed Rs 25 lakh.
• Condition: a down payment of at least 50 per cent of the value of goods purchased.

That last condition is the distinctive term of this scheme and deserves attention before anything else.

Who is eligible for the Scheme for Marketing Organisations?

You can apply if:

• You are an individual, a partnership concern, a private limited company or a public limited company, and you are experienced in marketing village and small industries products. Experience is written into the eligibility, not implied.
• You are a Khadi and Village Industries institution, and your proposal is supported by KVIC under its interest subsidy scheme.
• You are setting up a new sales outlet, or renovating or expanding an existing outlet, for VSI products.
• Your project cost is within Rs 25 lakh.
• You can meet the 50 per cent down payment on the value of goods purchased.
• The outlet serves the marketing of village and small industries products connected to Puducherry's producer base.

You cannot apply, or are not eligible, if:

• You have no experience in marketing VSI products. A first-time retailer with no track record in this line does not meet the stated eligibility. Build the experience, or partner with someone who has it.
• You run a general retail business unrelated to village and small industries products. The scheme finances a specific kind of outlet.
• Your project cost exceeds Rs 25 lakh. The ceiling is stated as the cost of the project, not the loan, so the whole project must fit within it.
• You cannot fund half the stock value yourself. The 50 per cent down payment on goods purchased is a term of the scheme.
• You are a KVI institution without KVIC support. The eligibility expressly ties KVI proposals to KVIC backing under its interest subsidy scheme.
• You want a mobile sales van. That is the second limb of PIPDIC's marketing activities scheme, with a loan limit not exceeding Rs 3 lakh per vehicle and not more than six vehicles.
• You are an existing defaulter to PIPDIC, another institution or a bank.

A point of clarification worth making, because it is a common confusion: this scheme is not for hotels or restaurants. PIPDIC does finance hotel and restaurant projects, but under its separate Scheme for Tourism related activities, where the project cost is not to exceed Rs 1,200 lakh and repayment runs up to 10 years including a moratorium. An applicant planning a restaurant should apply under that scheme, not this one.

What are the terms, and what does the 50 per cent condition mean?

The published terms are:

• Cost of project: not to exceed Rs 25,00,000
• Down payment: at least 50 per cent of the value of goods purchased

The down payment condition changes the shape of the proposal in a way applicants routinely miss. A retail outlet's largest recurring cost is stock. If PIPDIC requires half the value of goods purchased to come from the applicant's own funds, then the borrower must plan for a substantial and continuing own-funds commitment — not just an initial margin.

Take a worked illustration within the ceiling:

An applicant who has planned only for a small promoter's margin will be caught out at documentation stage. Establish the down payment capacity before building the proposal.

Where this scheme sits among PIPDIC's marketing and related products

Marketing organisations in Puducherry should also be aware of the parallel support from the Department of Industries and Commerce, which is separate from PIPDIC lending. Under the Marketing and Publicity scheme, sales emporia and showrooms recognised by the Government of Puducherry for selling handicrafts and micro and small enterprise products manufactured in the union territory are eligible for a sales rebate of 15 per cent on their sales. An outlet financed under this PIPDIC scheme that also obtains government recognition can therefore access that rebate. That combination is the strongest case a marketing organisation in Puducherry can build.

What documents are required?

How to apply for the Scheme for Marketing Organisations

1. Document your experience in marketing VSI products. This is the eligibility gate. Assemble past sales records, existing outlet details, supplier relationships with village and small industry producers, or a KVIC association.
2. Identify the outlet premises and obtain the lease deed, rent agreement or ownership document, with the area and rate clearly stated.
3. Build the project within Rs 25 lakh, splitting it into fit-out, stock and other costs, and calculate the 50 per cent down payment you must fund on the value of goods purchased. Confirm you can meet it before proceeding.
4. Obtain fit-out quotations for display units, counters, storage, lighting and interior works from more than one supplier.
5. Secure KVIC support if you are a KVI institution, since the eligibility ties such proposals to KVIC's interest subsidy scheme.
6. Register as a customer on pipdic.in and open the Loan Applications section, using the up-to-Rs-25-lakh application form for a project within the ceiling.
7. Complete the application and upload the documents, experience evidence, constitution documents, project proposal, premises proof, quotations, down payment evidence, security title documents and KYC.
8. Submit and note the reference, or file physically at the PIPDIC registered office, 60 Romain Rolland Street, Puducherry 605 001.
9. Attend the appraisal and site inspection, and be prepared on the product mix, expected footfall and turnover, and how the outlet services the loan.
10. Accept the sanction, complete documentation and draw the loan, then consider applying separately to the Department of Industries and Commerce for recognition of the emporium so that the 15 per cent sales rebate becomes available.

Applicants outside Puducherry city can use PIPDIC's regional offices: Karaikal on 04368-292317, Thattanchavady on 0413-2271206, an office on 0413-2678105, Mahe on 0490-2332560 and 2332720, and Yanam on 08863-2321243.

How do I check my application status?

1. Log in to your customer account on pipdic.in, from which the application was filed.
2. Call the PIPDIC registered office on 0413-2335116 or email info@pipdic.com with your application reference.
3. Use the enquiry form on pipdic.in for pre-sanction questions and the separate grievance form for complaints.
4. Follow up at the regional office covering the outlet's location once the file reaches inspection.

Why applications get rejected, and how to fix them

• No demonstrable experience in marketing VSI products. The most frequent reason. Experience is written into the eligibility. Document it or bring in an experienced partner.
• Down payment capacity not established. Applicants often plan a promoter's margin on the fit-out but forget the 50 per cent on goods purchased. Show the funds.
• Project cost above Rs 25 lakh. Trim the project. The ceiling applies to the project cost, not just the loan.
• Applying for a restaurant or hotel under this scheme. Use PIPDIC's Scheme for Tourism related activities instead, where the project cost ceiling is Rs 1,200 lakh.
• KVI institution without KVIC support. Obtain the KVIC letter under its interest subsidy scheme before applying.
• Weak product mix. An outlet whose proposed stock is mostly bought-in general merchandise rather than village and small industries products does not fit the scheme's purpose. Anchor the mix in VSI, handicrafts, coir and khadi lines.
• Turnover projections without a basis. Support the sales estimate with footfall, location and comparable outlet data.
• Encumbered security or unclear title. Obtain the encumbrance certificate early.

What are the key dates?

PIPDIC accepts loan applications on a rolling basis and publishes no last date for this scheme. PIPDIC and the Government of Puducherry both run a financial year from 1 April to 31 March, when interest rates and scheme parameters are ordinarily reviewed.

For a marketing organisation, the practical calendar is commercial rather than administrative. Retail outlets selling handicrafts, coir and khadi products in Puducherry earn disproportionately during the festival and tourist seasons, so an applicant should time the sanction, fit-out and stocking so that the outlet opens ahead of a season rather than after it. Where the applicant also intends to seek government recognition for the 15 per cent sales rebate, allow additional time for that separate departmental process.

How do I raise a grievance?

1. Use the grievance form on pipdic.in, maintained separately from the general enquiry form.
2. Contact the PIPDIC registered office, 60 Romain Rolland Street, Puducherry 605 001, on 0413-2335116, fax 0413-2336842, or email info@pipdic.com.
3. Escalate to the Director of Industries and Commerce, Industrial Estate, Thattanchavady, Puducherry 605 009, on +91-413-2248476, +91-413-2248168 or +91-413-2248320.
4. The departmental head is the Secretary to Government (Industries and Commerce), Chief Secretariat, Puducherry 605 001, on +91-413-2336115.
5. For matters concerning the sales rebate and emporium recognition, contact the District Industries Centre on +91-413-2248391 or at dic.pon@nic.in.

PIPDIC charges its published processing and service charges only. No agent or intermediary is authorised to collect money on a promise of arranging a sanction.