Cottage and Village Industries Composite Loan Scheme — Up to ₹25L
PIPDIC's composite loan gives Puducherry cottage, village and micro units up to ₹25,00,000 as a combined term and working capital facility, repayable over 8 years.
- Funding amount
- ₹25L (debt / loan)
- Funding type
- Debt / Loan
- Provider
- Pondicherry Industrial Promotion Development and Investment Corporation (PIPDIC) (Government)
- Application deadline
- Rolling
- Eligible stage
- Any stage
- Location
- Open to startups registered in India
Overview
PIPDIC — the Pondicherry Industrial Promotion Development and Investment Corporation Limited — runs this composite loan scheme together with the Puducherry Department of Industries & Commerce. It exists to put affordable credit within reach of the Union Territory's smallest manufacturers: artisans' village and cottage units, small industries working in the tiny sector, and micro enterprises.
The word "composite" carries the real value here. Instead of forcing a promoter to file one application for capital expenditure and another for running costs, the scheme sanctions a single facility of up to ₹25,00,000 per unit that can pay for new machinery and equipment as well as everyday working capital. For a unit that has just ordered plant, or that is waiting on receivables, that combined structure removes a serious financing headache.
Both fresh projects and already-operating micro enterprises are covered. The assistance is a debt facility, so the amount is repaid with interest rather than exchanged for a share of the business. Applications move through the PIPDIC portal and are accepted round the year, with no fixed closing date to wait for.
Behind the scheme sits a wider aim: encouraging industry at the grassroots level in Puducherry, helping small ventures grow, and generating local employment as they do so.
Highlights
- Composite loan of up to ₹25,00,000 per unit for Puducherry units
- Covers both new machinery and equipment and working capital needs
- Repayment spread over a maximum of 8 years, including a moratorium of up to 1 year
- Interest at 10% per annum, with a 0.5% concession for Women, SC, ST and Differently Abled promoters
- Promoter must be a Puducherry resident; machinery cost capped at ₹25,00,000 per unit
- Rolling deadline — applications accepted online through the year
Who can apply
Promoter residency. The person promoting the unit must be a resident of Puducherry.
Sector. The project has to sit in one of three baskets — the Artisans Village and Cottage Industries sector, Small Industries in the tiny sector, or a Micro Enterprise project.
Stage. New projects and existing micro-enterprise ventures are both covered.
Use of funds. The application must be for assistance towards fixed assets, working capital, or a combination of the two. The listed purpose is acquiring new machinery and equipment and/or meeting working capital needs.
Machinery ceiling. The cost of machinery is capped at ₹25,00,000 per unit.
Cottage and Village Industries Composite Loan Scheme — Up to ₹25L is open to startups at any stage. It is open to startups registered anywhere in India.
- Eligible stage
- Any stage
- Location
- Open to startups registered in India
Deadline & timing
Cottage and Village Industries Composite Loan Scheme — Up to ₹25L accepts applications on a rolling basis — there is no fixed cut-off date, so eligible startups can apply at any time. Because rolling programmes can pause without notice, confirm the window is still open on the official site before you start.
What the funding covers
Financial assistance of up to ₹25,00,000 per unit is sanctioned as a composite term loan and/or working capital loan.
- Fixed assets: the money can be used to buy new machinery and equipment for the unit.
- Working capital: a portion of the facility can cover day-to-day operating requirements, keeping the business running smoothly while it grows.
- Repayment window: a maximum of 8 years, and that window includes a moratorium of up to 1 year.
- Debt Equity Ratio: 3:1 for loans under this scheme of up to ₹25,00,000.
- Interest rate: 10% per annum on both the term loan and the working capital loan.
- Concession: units promoted by Women, Scheduled Caste (SC), Scheduled Tribe (ST) or Differently Abled persons are charged 0.5% less than the normal rate.
Collateral. Immovable property is required as security, over and above the mortgage or hypothecation of the proposed fixed assets.
- Property located in Puducherry must be worth at least the amount of the term loan sanctioned.
- Property located outside Puducherry must be worth at least 150% of the loan amount if it is land with a building, or 200% if it is land only.
- For units promoted by Women, SC, ST or Differently Abled persons, the immovable property requirement drops to 50% of the loan amount.
Application fee. ₹100 applies for loans of up to ₹25,00,000, paid as part of the online process.
About the provider
Cottage and Village Industries Composite Loan Scheme — Up to ₹25L is offered by Pondicherry Industrial Promotion Development and Investment Corporation (PIPDIC), a government body. As a government-backed debt / loan, it is publicly funded and open to eligible startups across India.
How to apply
Applications are submitted on the . Confirm the current deadline and document checklist there before you start.
Selection process
Applications are filed online through the PIPDIC website. Once an application is submitted, it goes to a dedicated committee within PIPDIC for screening.
That committee weighs the eligibility criteria, the viability of the proposed project, the financial health of the enterprise, and whether the collateral offered is adequate. Although the internal stages are not spelled out in detail, the review typically includes a detailed financial assessment, a technical appraisal — particularly relevant where machinery purchases are involved — and a credit evaluation.
Applicants who are shortlisted may be contacted for clarifications or a deeper discussion of their project and finances before a final decision on sanction is taken. The intent is to identify micro enterprises that can genuinely put the assistance to work and contribute to the local economy.
Documents you’ll need
Before you apply to Cottage and Village Industries Composite Loan Scheme — Up to ₹25L, keep the following documents ready:
- A pitch deck or short business plan describing the problem, product and traction
- Company registration documents and PAN
- Founder identification (PAN / Aadhaar) and brief profiles
- Recent financial statements or projections
- Product details — a demo, prototype or working link if available
Exact requirements are confirmed on the official application portal — treat this as a preparation checklist.
Who this is best for
Cottage and Village Industries Composite Loan Scheme — Up to ₹25L is best suited for startups in India seeking non-dilutive funding of ₹25L. If that describes your startup, review the eligibility criteria above before applying.
Frequently asked questions
How much can a unit borrow under this scheme?
A unit can receive up to ₹25,00,000. The assistance comes as a composite loan, meaning the sanctioned amount can be split between a term loan, a working capital loan, or both, depending on what the enterprise needs.
Who is eligible to apply?
The promoter has to be a resident of Puducherry. The project itself must belong to the Artisans Village and Cottage Industries sector, Small Industries in the tiny sector, or be a Micro Enterprise project. The application must also be for fixed assets and/or working capital assistance, and the cost of machinery cannot exceed ₹25,00,000 per unit.
Can an existing business apply, or is this only for new ventures?
Both are covered. The scheme is designed for new as well as existing micro-enterprise projects, so a running unit looking to add machinery or strengthen its working capital can apply alongside a first-time promoter.
Does the scheme take equity in my business?
No. This is a debt facility, not an equity investment. You repay the sanctioned amount with interest at the applicable rate, and PIPDIC does not take a stake or ownership share in your enterprise.
What can the loan money be used for?
The proceeds go towards fixed assets — specifically the purchase of new machinery and equipment — and towards working capital requirements. That second part is what lets a unit cover routine operating expenses and keep the business running while it grows.
What are the interest rate and repayment terms?
Interest is charged at 10% per annum on both the term loan and the working capital loan. The maximum repayment period is 8 years, and it includes a moratorium of up to 1 year. Units promoted by Women, Scheduled Caste, Scheduled Tribe or Differently Abled persons get a concessional rate that is 0.5% below the normal rate.
Is collateral security required?
Yes. Immovable property must be offered as collateral, in addition to the mortgage or hypothecation of the proposed fixed assets. Property situated in Puducherry must be valued at not less than the term loan sanctioned. For property outside Puducherry, the value must be at least 150% of the loan if it is land with a building, or 200% if it is land only. Units promoted by Women, SC, ST or Differently Abled persons need collateral worth only 50% of the loan amount.
Is there an application deadline?
No. The scheme runs on a rolling basis and applications are accepted online throughout the year, so there is no fixed closing date to work towards.
What is the application fee?
The fee is ₹100 for loans of up to ₹25,00,000. It is paid online once the application and the promoter's bio-data have been submitted, and a receipt is generated that you can print or save as a PDF.
How do I apply for the composite loan?
Apply through the PIPDIC website. Create a new customer account with a username, email ID, password and captcha, then log in using the OTP sent to your email and complete your profile under "Edit Profile". From the dashboard, open the "Applications" tab. A pop-up listing the general terms and conditions, interest rates, investigation fees and collateral security norms appears — review it and click "I Agree". Fill in the multi-step application form, accept the declaration, then enter the bio-data of the promoter, partner or director and upload the KYC and supporting documents requested against each field. Pay the applicable fee and save the receipt.
Is DPIIT recognition required for Cottage and Village Industries Composite Loan Scheme — Up to ₹25L?
No. DPIIT (Startup India) recognition is not listed as a mandatory requirement for Cottage and Village Industries Composite Loan Scheme — Up to ₹25L, though having it can strengthen your application and unlock other benefits.
Who offers Cottage and Village Industries Composite Loan Scheme — Up to ₹25L?
Cottage and Village Industries Composite Loan Scheme — Up to ₹25L is offered by Pondicherry Industrial Promotion Development and Investment Corporation (PIPDIC), a government body. It is provided as non-dilutive funding.
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