Does J&K Development Finance Corporation provide both
Term & Working Capital loans ?
J&K Development Finance Corporation Ltd. extends Term
Loan facility only. It does not extend Working Capital
loans as it is not a part of payment & settlement system
as are the scheduled Banks.
What are the sectors that are provided Term Loans by the
JKDFC Ltd ?
JKDFC extends term loan facilities to MSME manufacturing
sector only. It also provides Term loans for
establishment of Hotels & Guest Houses. It does not
finance commercial transport.
the quantum of Term loan that JKDFC can provide to an
MSME manufacturing unit ?
JKDFC provides term loans in the range of Rs. 20 lakhs
to Rs. 1000 lakhs to any individual, partnership firm or
a Company, established under Companies Act, 1956.
Does the Corporation provide term loans to MSME Service
As of now, the Corporation does not extend term loans to
MSME service sector.
Does the Corporation provide the services of
Counseling/Detailed Project Report Formation (DPR)?
Yes, the DPR’s are issued on cost to cost basis.
What is the %age of the project cost that JKDFC finances
as term loan?
Depending upon the credentials of the prospective
entrepreneur & viability of the Project, the range of
Term loan varies from 65% to 75% of the project cost.
What is the rate of interest charged by JKDFC on the
Loans are provided on competitive rates.
What is the security to be offered to JKDFC against the
term loan granted?
Primary security with two guarantors together with
collateral security as under:
up to a term loan of Rs. 50.00lakhs
100% of the loan amount
above Rs. 50.00lakhs to Rs.
75% of the loan amount with a minimum of Rs.
above Rs. 150 lakhs to
Rs. 1000.00 lakhs
50% of the loan amount with a minimum of Rs. 112lakhs
|Is JKDFC a Member Lending Institution of Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) & whether it provides collateral & guarantee free loans to MSE sector under CGTMSE Scheme?
JKDFC is an MLI of CGTMSE. It can finance under CGTMSE
cover up to a loan of Rs.50.00lakhs, depending upon the
viability of the project & credit rating of the
What is the periodicity of the term loan?
The term loan is repayable in quarterly rests within a
period of five years with a moratorium of 1-2 years,
depending upon the implementation period of the project.
When & how the interest is charged?
The interest is charged/ payable on balance outstanding
on quarterly basis.
What are the approvals necessary for seeking Term loan
assistance from JKDFC?
Among other things, following approvals/documents are a
pre-requisite while applying for term loan assistance:
Registration as the case may be;
sanction from JKPDD;
allotment from DIC/JKSIDC/JKSICOP in case of Govt. land;
papers/lease deed (for a period of 20years) in case of
- NOC from
JK State Pollution Control Board;
Capital commitment letter from any scheduled bank.
- NOC from
Banks/FI’s operating in the area where unit is to be set
How are funds released once the term loan is sanctioned?
Once term loan is sanctioned & legal documentation is
completed, the Corporation will release its part of
funding on “First Investment Clause” Basis whereby the
entrepreneur shall have to invest his contribution in
full in first instance where after the Corporation will
release its part.
What are the incentives being provided in the J&K
Special Central Package-II?
Central Capital Investment Subsidy to all new industrial units &
existing units on their Substantial Expansion @ 15% of
the investment on P&M subject to a ceiling of Rs. 30.00
lakh & @ 30% for MSME sector subject to a ceiling of Rs.
3.00 crore for manufacturing sector & Rs. 1.50 crore for
3% Central Interest Subsidy on the Working Capital Loan to new
industrial units for a period of 5 years from the date
of commercial production/operation.
Central Comprehensive Insurance Subsidy to the extent of
100% to all the new & existing units on substantial
expansion for a period of 5 years from the date of
What is the duration of the scheme?
shall be operative for a period of five years from
15.06.2012 to 14.06.2017.
Who is eligible for these incentives?
The subsidy will be available to the Industries in
notified areas and also to specified Thrust Industries
outside such notified areas.
(for details pl. refer:
Is there any industry which falls in the negative list
and hence ineligible for subsidy?
The negative list includes:
of tobacco, manufactured tobacco & substitutes,
distillation/brewing of alcoholic drinks & manufacture
of branded soft drinks & its concentrates.
Weapon or ammunition.
Pan Masala as covered under Chapter 21 of the First Schedule to
the Central Excise Tariff Act, 1985 (5 of 1986).
Plastic carry bags of less than 20 microns as specified by
Ministry of Environment & Forest Notification No. S.O.
705E dated 02.09.1999 & S.O. 698E dated 17.06.2003.
single unit avail subsidy from Central as well as State
Government for the same purpose?
Incentives can be availed either under State or Central
Are the units financed by JKDFC only eligible for
No. The unit can be financed by any Bank/FI. Self
financed units are also eligible for Capital Investment
Subsidy & Insurance Subsidy.
What is the eligibility period of the scheme?
subsidy will be available during the duration of the
scheme to such units as have pre-registered & commenced
commercial production/operation prior to 14.06.2017.
When can a
unit file its claim for subsidy?
The unit should file its claim as per prescribed
procedure with General Manager. District Industries
Centre concerned within one year from the date of
commencement of commercial production/operation.
Is second hand Plant & Machinery eligible for Capital
No, second hand P&M is not eligible for Capital
Is Plant & Machinery which has been procured by making
cash payment eligible for Capital Investment Subsidy?
No, cash payment whatsoever is not eligible. Payments
made through Cheques /RTGS/ NEFT/DD are only eligible
for Central Govt. Package of Incentives.
Can the subsidy be disbursed prior to commencement of
No, the subsidy is disbursed only after commencement of
commercial production after pre-disbursement inspection
has been conducted.
Which unit qualifies to be a new industrial unit & which
unit can be termed as an existing unit?
An industrial unit which commences commercial
production/operation on or after 15thJune,
2012 will be treated as a new unit and a unit which has
commenced commercial production/ operation before 15th
June, 2012 will be treated as an existing unit.
What criterion has to be fulfilled for substantial
expansion of an existing unit?
Substantial expansion means increase by not less than
25%in the value of Plant & Machinery of an
industrial unit for the purpose of expansion of
Insurance subsidy is calculated on the book value or the
market value of the assets?
For claiming the insurance subsidy, policy obtained on
market value of the assets is considered.
Is insurance cover for stocks of the unit eligible for
No. Insurance cover for stocks of the unit is not
covered under this package.
Which components will not be considered for computing
the value of Plant & Machinery eligible for Capital
The components which are not considered include, loading
& unloading charges, sheds/ buildings for Plant &
Machinery, miscellaneous fixed assets such as DG sets,
etc, working capital including raw material and other
consumable stores, commissioning cost, captive power
plants, storage equipments, weigh bridge, laboratory
testing equipment, erection & installation charges.
What is the procedure for settlement of claim under
Concerned GM, DIC after having received the claim will
process the same, in terms of DIPP, GOI,
Ministry of Commerce & Industry Guidelines for being
placed before the State Level Committee-I. SLC
after according approval will refer the cases to
Directorate concerned for issue of sanction or
otherwise. Same will be followed by documentation by
concerned GM,DIC. GM, DIC concerned after compliance of
all codal formalities will forward the case to JKDFC
through concerned Direct orate for release of funds.
JKDFC on receipt of the claim documents will conduct on
spot inspection to ascertain the functional status of
the unit as on date of disbursement.