Samridhi Fund

The Samridhi Fund is a social venture capital fund, formulated with contribution from the Small Industries Development Bank of India (SIDBI), Department of Internation Development (DFID), Life Insurance Corporation of India (LIC) and United Insurance company limited (UIIC). The principal objective of the Samridhi Fund is to provide risk capital to scalable companies which support economic, social or environmental benefits to the poor in low-income states of India. The Samridhi fund is being managed by SIDBI Venture Capital Limited (SVCL), a subsidiary of SIDBI.In this article, we will look at the Samridhi Fund in detail.

Features of Samridhi Fund

The fund is mainly applicable to the companies which have a developmental impact in low-income States of India such as Bihar, Uttar Pradesh, Madhya Pradesh, Odisha, Chattisgarh, Jharkhand, Rajasthan and West Bengal. Further, these companies should have the following characteristics:

The enterprises should be economically viable to get the Samridhi Fund
In order to get financial assistance under the Samridhi Fund, the enterprises have to provide access to markets of the poor
The firm needs to be socially relevant and impact the poor as customers, producers or employees
If a company increases the flow of capital of the low-income states of India, such company can easily avail the benefits of the Samridhi Fund
The firms which focus on the environment, social and Governance also matters eligible for the financial assistance under the Samridhi Fund

Investment Criteria

Financial assistance is provided as part of the Samridhi Fund to social enterprises which can deliver both financial and social returns.

The fund is mainly applicable to the companies which have a developmental impact in the low-income States of India
As described above, the primary investment focus of the Samridhi Fund is growth stage investments in undertakings with target beneficiaries from eight low-income states of India
It is also available for the companies having established business model and excellent promoter with an experienced management team which create jobs.
The enterprises which enhance the disposable incomes, quality of life and infrastructure of the poor in eight low-income States of India can quickly get the Samridhi Fund

Target Sectors

Samridhi Fund is provided for companies which are MSMEs, and mainly provided in the following high-impact sectors:

Water and Sanitation
Agriculture and Allied Activities
Financial Inclusion including MFIs
Livelihood Building
Affordable Healthcare
Clean Energy and Green Technologies
Education and Skill Building

Nature of Samridhi Fund

Samridhi fund generally ranges from Rs.5 to Rs.25 crore and will be structured as equity or equity-linked instruments and convertible instruments (debentures, preference shares) to suit the requirements of the Investee company. Note: In exceptional cases, Samridhi may invest amounts outside this range, mainly when a strong developmental impact can be generated.

Eligibility Criteria

The eligibility criteria to obtain the Samridhi fund is listed as follows:

Enterprises with a proven business model going for expansion which can generate developmental benefits for poor households or the community
The enterprises must have plans to expand operations in any of the low-income states of India.

Non-Applicability of Samridhi Fund

The Samridhi fund does not apply to the following type of enterprises:

The enterprises engaged in illegal or banned activities including the child labour are excluded from the Samridhi Fund
Businesses dealing with hazardous chemicals, pesticides, asbestos and wastes; ozone depleting substances; and endangered or protected wildlife or wildlife products are also excluded from the Samridhi Fund
Samridhi fund is not applicable for the arms and ammunition
Companies which have been proven to be involved in fraud and corruption cannot avail the benefit of Samridhi fund

Documents Required

The enterprises seeking funding from Samridhi have to provide the following documents:

Detailed information memorandum containing the background of the firm
The promoter and investor details
Past financials detailed documents
Business Plan
Financial Projection

Time Frame

The Samridhi funding process is typical taxes three to six months and involves the following stages:

lGo/No Go Decision – based on preliminary review by SVCL and a presentation by the firm; the Investment will make a decision
Committee (IC)
Detailed appraisal by SVCL team
Final Investment Committee Decision
Due Diligence and Documentation

Application Procedure to get Samridhi Fund

The application procedure to get the Samridhi Fund is explained in detail below: Step 1: The company have to submit the business plan in a prescribed format to SIDBI Venture Capital Limited. You have to send an email to Email: samridhi@sidbiventure.co.in, including a copy of the executive summary of the business plans, the profile of the management team, historical and future financial and industry information. The business plan of the company should include the following information:

Details of the product/ service
Information regarding the customers and the nature and size of the markets
Details related to the USP and IP and competitive advantage
Need for Samridhi fund
Information on the deliverable and goals that the firm
The founder and the executive team details
A credible and realistic execution plantation

In case you require any assistance for preparing the business plan, you can get in touch with the IndiaFilings.com Step 2: Based on a preliminary assessment of the business plan, a course of further interaction with SVCL will be decided. Step 3: The respective company will have to present their business plan. After the due diligence and documentation, the funding will be processed.