Scheme Of Assistance To Women Entrepreneurs (Mahalir Udavi)

What is the Mahalir Udavi scheme?

Scheme of Assistance to Women Entrepreneurs, known by its Tamil name Mahalir Udavi: literally "help for women", is a special scheme of the Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC), the Government of Puducherry undertaking established in 1974 to promote the union territory's industrial development and to finance its entrepreneurs.

According to PIPDIC's published schemes of assistance:

• Eligible borrowers: all existing and new SSI and tiny units promoted exclusively by women entrepreneurs, or consisting of a majority of women entrepreneurs.
• Purpose: for setting up new SSI units.
• Project cost: up to Rs 20 lakh.
• Term loan: 75 per cent of the project cost.
• Debt-equity ratio: up to 3:1.
• Promoter's contribution: 25 per cent of the project cost.
• Repayment: 5 to 10 years including a moratorium period of 1 to 2 years.

The two features that distinguish Mahalir Udavi from PIPDIC's general lending are the high loan-to-cost ratio and the long repayment horizon. Seventy-five per cent of project cost as term loan is generous for a small industrial project, and 5 to 10 years of repayment with a 1 to 2 year moratorium at the start gives a new unit real breathing space before instalments begin. Both are deliberate: a first-time woman promoter setting up a Rs 20 lakh unit typically has limited collateral and no operating cash flow in year one.

Who is eligible for Mahalir Udavi?

You can apply if:

• Your unit is an SSI or tiny unit, a small scale or micro manufacturing or eligible service enterprise.
• The unit is promoted exclusively by women entrepreneurs, or consists of a majority of women entrepreneurs. Either satisfies PIPDIC's stated eligibility.
• The unit is new or existing. PIPDIC's eligible-borrower description covers both, though the stated purpose is setting up new SSI units.
• The unit is or will be located in the Union Territory of Puducherry: Puducherry, Karaikal, Mahe or Yanam.
• The project cost is within Rs 20 lakh, and you can bring 25 per cent of it as promoter's contribution.
• Your project is technically and commercially viable on the strength of a project report.

You cannot apply, or are not eligible, if:

• Women are a minority among the promoters. A single woman partner in a firm of four does not meet either limb of the test. The unit must be exclusively women-promoted or have a majority of women promoters.
• Your project cost exceeds Rs 20 lakh. Larger women-led projects should be taken to PIPDIC's general Scheme for SSI / MSI Sector, which lends up to Rs 1,000 lakh, or to Mahila Udyam Nidhi if an equity-type structure suits better.
• You cannot bring 25 per cent of the project cost. The promoter's contribution is a fixed term of the scheme, not a negotiable one.
• Your activity is trading rather than SSI or tiny manufacturing or an eligible service activity.
• Your unit is outside the Union Territory of Puducherry.
• You are seeking a personal loan or a self-help group loan. Mahalir Udavi is industrial term finance for a unit, not a microfinance or livelihood loan.
• You are an existing defaulter to PIPDIC, another institution or a bank.

How much money is involved, and on what terms?

The arithmetic of the scheme is fixed by the 75:25 split against a Rs 20 lakh ceiling.

The maximum term loan under the scheme is therefore Rs 15 lakh, reached on a full Rs 20 lakh project.

Repayment is 5 to 10 years including a moratorium of 1 to 2 years. Read that carefully: a 5-year sanction with a 2-year moratorium leaves 3 years of instalments, not 5. The moratorium is a repayment holiday on principal at the start, designed for the period when a new unit is installing machinery and building its market. Interest treatment during the moratorium is set in the sanction letter.

The debt-equity ratio of up to 3:1 is consistent with the 75:25 split and gives PIPDIC room to structure the case.

How Mahalir Udavi compares with PIPDIC's other women's scheme

PIPDIC runs two schemes for women entrepreneurs, and they are structured differently. Choosing the wrong one costs money.

The practical trade-off: Mahila Udyam Nidhi asks for only 10 per cent of the project cost from the promoter. A decisive advantage for a woman with a viable idea and little capital — but caps the project at Rs 10 lakh and covers only new units. Mahalir Udavi allows twice the project size and covers existing units, but requires 25 per cent from the promoter. A woman with Rs 1 lakh to invest should look at Mahila Udyam Nidhi; a woman with Rs 5 lakh planning a Rs 20 lakh unit should look at Mahalir Udavi.

What documents are required?

How to apply for Mahalir Udavi

1. Size the project within Rs 20 lakh and arrange your 25 per cent. Both are hard terms of the scheme. Establish that you can bring Rs 5 lakh before you build a Rs 20 lakh project report.
2. Get the ownership structure right on paper. The partnership deed, memorandum and articles, or proprietorship declaration must show on its face that the unit is promoted exclusively by women or that women are a majority of the promoters. This is what PIPDIC checks first.
3. Prepare the detailed project report: product, installed capacity, machinery list with supplier quotations, raw material sourcing, market, cost of project, means of finance and projected profitability and repayment capacity across the 5 to 10 year horizon.
4. Register as a customer on pipdic.in and open the Loan Applications section. Because the ceiling is Rs 20 lakh, the up-to-Rs-25-lakh application form is the one to use.
5. Complete the application and upload the documents, project report, constitution documents, Udyam certificate, premises proof, machinery quotations, evidence of promoter's contribution, security title documents and promoter KYC.
6. Submit and note the reference. Applicants who prefer to file physically can submit at the PIPDIC registered office, 60 Romain Rolland Street, Puducherry 605 001.
7. Attend the appraisal and site inspection, and be ready to answer on the market for the product and on how the unit will service instalments once the moratorium ends.
8. Accept the sanction, complete documentation and create the security, then draw the loan against project implementation.

Women entrepreneurs 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 with the branch office covering your region for site inspection and documentation stages.

Why applications get rejected, and how to fix them

• Women not exclusive or majority promoters. The commonest reason for rejection under this scheme, and usually a drafting problem rather than a real one. If the intention is a women-led unit, make the deed or shareholding reflect it before applying.
• Project cost above Rs 20 lakh. Either trim the project to fit, or apply under the general SSI/MSI scheme instead. Splitting one project into two applications to stay under the ceiling will not survive appraisal.
• Promoter's contribution not demonstrable. Twenty-five per cent is a term, not a target. Show the funds in a bank account, or show a credible source.
• A project report without quotations or a market assessment. Machinery quotations and a realistic sales plan are the two things appraisers look for first.
• Repayment capacity not shown beyond the moratorium. The moratorium ends. Project the cash flow for the instalment years, not just the construction year.
• Encumbered or unclear title to the security. Get the encumbrance certificate early.
• Existing default. Clear defaults to any lender before applying.
• Udyam registration missing or in a different activity. Register in the correct line of manufacture.

What are the key dates?

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

The dates that govern an individual borrower are set by the sanction: the sanction date, the documentation date, the drawal schedule tied to project implementation, the end of the 1 to 2 year moratorium, the single most important date to plan for, because that is when instalments begin, and the final repayment date 5 to 10 years out.

How do I raise a grievance?

1. Use the grievance form on pipdic.in, which is 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.

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