Cottage Industries Business Financial Proposal for Karimganj

Financial Scheme Proposal for Cottage Industries Business Unit in Karimganj District

This proposal outlines a comprehensive financial plan for unemployed individuals seeking to start a cottage industry business unit in Karimganj District, Assam. The total loan amount requested is ₹2,00,000.

1. Business Unit Setup

Space Requirements

Minimum 200-300 sq. ft. of space is required to set up a small-scale cottage industry unit, including storage and workspace.

Furniture and Fixture

• Workbenches - ₹10,000
• Storage Racks - ₹5,000
• Chairs and Tables - ₹3,000

Machinery and Equipment

• Hand Looms/Knitting Machines - ₹30,000
• Cutting Tools - ₹5,000
• Packaging Machines - ₹15,000

Electrical Expenses

• Wiring and Setup - ₹8,000
• Lighting - ₹3,000

Miscellaneous Expenses

• Legal and Licensing Fees - ₹2,000
• Stationery and Office Supplies - ₹1,000

Total Fixed Cost

• Total Fixed Cost = ₹82,000

2. Working Capital and Operating Expenses

Monthly Operating Expenses

• Salary for 2 workers - ₹10,000
• Telephone Expenses - ₹1,000
• Transportation Expenses - ₹2,000
• Raw Materials (cotton, threads, etc.) - ₹20,000
• Miscellaneous (packaging, admin, etc.) - ₹1,000

Total Working Capital Required Per Month

• Total Working Capital = ₹34,000

Cost of Production

• Total Cost of Production per month = ₹34,000

Gross Profit

• Expected Sales Revenue = ₹50,000
• Gross Profit = ₹50,000 - ₹34,000 = ₹16,000

Net Profit

• Net Profit = ₹16,000

Break-Even Point

The break-even point will be reached when the business can cover its monthly expenses with revenue, estimated at ₹34,000.

Debt Service Coverage Ratio (DSCR)

• Assumed Loan EMI = ₹5,000
• DSCR = Net Profit / Loan EMI = ₹16,000 / ₹5,000 = 3.2

Repayment Schedule

• Loan Amount = ₹2,00,000
• Interest Rate = 10% per annum
• EMI = ₹5,000 per month
• Loan Repayment Tenure = 48 months

3. Bank and Financial Institutions Providing Loans

Bank Loan Schemes

• State Bank of India (SBI): Offers the SME loan scheme for micro-entrepreneurs in rural areas. Apply Here
• Assam Gramin Vikash Bank (AGVB): Offers rural business loans for cottage industries. Apply Here
• North Eastern Development Finance Corporation Ltd. (NEDFi): Provides financial assistance for small businesses in the Northeast. Apply Here
• MUDRA Loan (Micro Units Development & Refinance Agency): Provides loans up to ₹10 lakh for small businesses. Apply Here

Eligibility Criteria for Loan Application

• Must be a resident of Karimganj District, Assam.
• Unemployed and seeking to start a small cottage industry unit.
• Minimum age: 18 years.
• Should not have defaulted on previous loans.
• Basic knowledge or experience in the proposed business activity.

4. Government Skill Development Programs for Cottage Industries

Skill Development Programs

• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Provides skill training for rural entrepreneurs in small-scale industries like handicrafts, weaving, and processing. Apply Here
• Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY): Focuses on skill development for rural youth, offering training for non-farming sectors including cottage industries. Apply Here
• National Skill Development Corporation (NSDC): Provides vocational training programs in partnership with private institutions. Apply Here

Eligibility Criteria for Skill Development Programs

• Age: 15-35 years.
• Resident of rural areas of Assam.
• Belonging to economically weaker sections or BPL families (for DDU-GKY).
• Basic education and literacy level required for certain courses.

With the assistance of financial institutions, government schemes, and skill development programs, unemployed individuals in Karimganj can successfully establish cottage industry units, contributing to local economic growth and creating sustainable livelihoods.