Cottage and Village Industries Composite Loan Scheme — Up to ₹25L — Frequently Asked Questions

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.