KVIC: Full Form, Functions, Schemes, and Loan Process for Rural Entrepreneurs

The Khadi Village and Industries Commission performs the following functions:

• Planning, promoting, organising, and implementing programs for the development of Khadi and Village Industries (KVI).
• Coordinating with various agencies engaged in rural development for initiatives related to khadi and village industries.
• Maintaining a reserve of raw materials to facilitate the supply chain.
• Establishing common service facilities for processing raw materials.
• Assisting in the marketing of KVI products through artisans and other channels.
• Establishing connections with multiple marketing agencies for product promotion and sales.
• Encouraging and supporting research and development in the KVI sector.
• Addressing challenges associated with KVI products through research studies and capacity enhancement.
• Providing financial assistance to individuals and institutions involved in Khadi and village industries.
• Ensuring compliance with product standards to prevent the production of counterfeit products.
• Proposing and implementing projects, programs, and schemes for the development of Khadi and village industries.

Here are some of the roles of KVIC in the development of the Indian economy:

Employment generation

• KVIC plays an important role in generating employment in India.
• In 2021-22, KVIC provided jobs to over 4.5 lakh people both directly and indirectly.

Income generation

• KVIC helps generate income in rural areas. The income from village industries improves the livelihood of rural populations.
• In 2021-22, KVIC generated revenue exceeding Rs. 3,000 crores.

Exports

• KVIC promotes the export of khadi and village industry products.
• In 2021-22, KVIC exported products worth over Rs. 200 crores.

Preservation of traditional handicrafts and textiles

• KVIC helps preserve India's traditional handicrafts and textiles.
• It provides skill development training to young people, creating opportunities for entrepreneurship and self-employment.
• In 2021-22, KVIC trained over 1 lakh artisans and weavers.
• KVIC also provides financial and marketing support to artisans and weavers.

Sustainable development

• KVIC encourages the use of renewable energy sources and promotes eco-friendly practices in khadi and village industries.
• In 2021-22, KVIC used over 100 MW of renewable energy for its operations.

Some of the notable features of KVIC are:

• It is a statutory body established by the Khadi and Village Industries Commission Act 1956.
• KVIC promotes traditional and rural industries such as khadi, coir, village oil, sericulture, honey production, and handicrafts.
• Provides financial assistance for the establishment and development of village industries through schemes like PMEGP, SFURTI and REGP.
• KVIC also provides education, training and guidance to rural entrepreneurs, rural artisans and unemployed youth.
• It is primarily focused on promoting non-farming and agro-based activities in rural areas.

• KVIC creates employment opportunities and contributes to the growth of the Indian economy

  
  

Challenges of KVIC scheme

• Financial and credit issues:

  Delays in the release of funds and subsidies limit investment. Many beneficiaries, especially in remote areas, struggle to access credit. High NPAs under schemes such as PMEGP are often due to weak skills and poor market research. Complicated rules and licensing requirements also lead to delays.

• Marketing and competition:

  KVI products face strong competition from mass-produced goods. Weak links between production and marketing result in unsold stock. Poor branding, quality control, and lack of certification reduce competitiveness. There is also low awareness of government schemes and the value of KVI products.

• Operational and artisanal challenges:

  Limited infrastructure, skill shortages, outdated technology, and weak data and monitoring systems affect overall performance.

The KVIC loan is available to:

• Individuals aged at least 18 years with an 8th-grade pass certificate.
• Self-Help Groups (SHGs)
• Registered and Cooperative Societies

• Charitable Trusts, and various other entities.

  
  

Documents required for KVIC Loan

Several key documents are required for submitting an online application to KVIC:

• KYC documents of the applicant/borrower.
• Caste or community certificate, if applicable, to establish eligibility under specific reserved categories.
• Subsidy claim form, based on the applicant’s eligibility.
• Certified copy of the bye-laws for societies or associations applying.
• Lease or rent agreement for the premises or shed, which must be valid and not older than three years.
• A detailed project report, outlining total project cost with a clear breakdown of capital expenditure and working capital requirements for one production cycle.
• If working capital is not required, a certificate confirming the same must be issued by the bank's controlling office.

The interest rate for PMEGP loans and KVIC support is aligned with the standard rates applicable to MSME enterprises. Currently, most banks charge interest starting at approximately 1.25% per month. However, under the Interest Subsidy Eligibility Certificate (ISEC) scheme, a concessional rate of 4% is offered. The difference between this subsidised rate and the actual bank interest is covered by KVIC under the "Grants" section of its budget.

This interest subsidy is available exclusively to manufacturers of khadi and Polyvastra.

How to avail loans from banks under the KVIC scheme

• Visit the KVIC website at https://www.kviconline.gov.in/pmegpeportal/jsp/pmegponline.jsp
• Complete the online application form provided. Input your personal details including name, Aadhaar Number, date of birth, address, bank information, business particulars, etc.
• Save the application after filling it out.
• Upload necessary documents such as passport-sized photo, Aadhaar card, population certificate, EDP training certificate, and higher education certificate.
• Finally, click on the 'Final Submission of Application to Sponsoring Agency' button.

Upon final submission, an application ID will be generated and sent to your registered email address, confirming the successful submission of your loan application. You can print this page for future reference.

The Khadi and Village Industries Commission (KVIC) plays a pivotal role in driving inclusive economic development, particularly in rural India. By promoting traditional industries, generating employment, and offering accessible business loan options through schemes like PMEGP, KVIC empowers artisans and entrepreneurs to build sustainable livelihoods. For anyone seeking to launch or expand a rural enterprise, KVIC serves as a vital platform for financial support, skill development, and long-term growth.

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