Soft Loan against PO for Women Entrepreneurs

The Government of Kerala has initiated various schemes for the welfare of women and their development. A significant concern has been to make them self-reliant by empowering them in business, for which the Kerala Startup Mission (KSUM) has implemented the Soft Loan against PO for Women Entrepreneurs. Under this scheme, financial assistance will be provided for executing the purchase orders received from Government Department or Public Sector Undertaking in Kerala.

Kerala Startup Mission (KSUM)

The Kerala Government introduced the Kerala Startup Mission (KSUM) to foster the growth of innovation lead technology entrepreneurship and incubation activities in Kerala. Kerala Startup Mission (KSUM) supports women startups with a Soft Loan against a purchase for an amount limited to Rs.15 Lakhs for executing the purchase orders received from Government Department or Public Sector Undertaking in Kerala. Soft Loan against Purchase order will be given on the same terms as the seed loan of Startup mission

Objectives of Soft Loan against PO Scheme

The prime objective of the Kerala Startup Mission is to employ this scheme to assist women to be self-reliant by undertaking the businesses and micro-enterprises and prevent them from borrowing money at high-interest rates from the moneylenders for the same

Benefits of the Scheme

The Benefits of the Soft Loan against PO Scheme are listed below:

The scheme helps in motivating women entrepreneurship of the state by financially supporting them
Soft Loan against PO Scheme elevates women's status by participating in businesses and building micro-enterprises.
The Scheme not only enhances the income of an individual or family but also contributes to the overall growth of the state by initiating an economic boom.
This loan scheme provides social and financial security to the women in the state.

Eligibility Criteria Soft Loan against PO Scheme

The eligibility criteria to apply for the Soft Loan Scheme for Women entrepreneurs are given below:

The women co-founder should have a majority stake in the startup.
The startup should be a registered company in Kerala as an LLP or Pvt. Ltd company and should have an active registration with KSUM at the time of application.
The startup company should have a DPIIT registration and an ‘Active’/ ‘Active Compliant’ status with MCA. Applications with ‘Active Non-compliant’ have chances to be rejected and this (Form INC 22A) should be done before fund disbursements are made.
The startups shall not have any other pending dues with any of the Government agencies, KSUM, Other incubators in the state and shall not be blacklisted by any Government agency in India.
The startup director should have a good CIBIL Score, preferably more than 750.
The client should be a Government Department or Public Sector Undertaking.

Quantum of Assistance

As mentioned above, Under the Soft Loan against PO Scheme, all the eligible women entrepreneurs will get Rs.15 Lakhs as seed loan for executing the purchase orders received from Government Department or Public Sector Undertaking in Kerala.

Pattern of Financing

The amount of loan is limited to 80% of the Purchase order and disbursement is as an advance against the milestone payment agreed by the client.

Rate of Interest

The soft loan will have 6% simple interest and must be repaid in 1 year or on completion of the project with the full settlement, whichever is earlier.

Repayment of Loan

The repayment period of the loan is 1 year or completion of the project with the full settlement, whichever is earlier.

Other Conditions

The Startup should ensure the proper delivery of the product service specified in the purchase order and the disbursement from the second installment will be based on satisfactory completion of a milestone as certified by the client.

Documents Required

The documents required to apply for the Soft Loan Scheme for Women entrepreneurs are as follows;

MOA (Memorandum of Association)
AOA (Article of Association)

Soft Loan against PO for Women Entrepreneurs– Application Procedure

The procedure for applying for Soft Loan Scheme is explained below:

The Women entrepreneurs need to access the home page of Startup Mission, Kerala web portal.
From the homepage, click on the Navigation Assistant option and then select the Women option.
By clicking on the soft loan against PO option, the link will redirect to the scheme page. Select the apply now option to proceed further with the application form. The application is a two-stage process.
A startup can apply the scheme along with the copy of the Purchase order received from the Government Department or Public Sector Undertaking.

The applications received under the scheme will be processed separately on a fast track model based on the recommendation of the committee with the following members:

Manager (Finance), Kerala Startup Mission
Assistant General Manager (Finance) / Chief Finance Officer - Kerala
Financial Corporation / Kerala State Industrial Development Corporation / IT parks
Secretary & Registrar, Kerala Startup Mission

The selected Startup will sign an agreement with the Kerala startup Mission before availing the benefit. A personal guarantee needs to be executed by the Women founder for availing of the loan.