Everything to know about the NIRVIK Scheme

The Finance Minister of India, Nirmala Sitharaman, in the Union Budget of 2020-21, announced the Niryat Rin Vikas Yojana (NIRVIK) to improve the condition of the export sector of the country. The government will implement this scheme under the Export Credit Guarantee Corporation of India (ECGC). Under this scheme, the government will provide credit support to small-scale exporters and reduce their insurance premiums to help them grow their businesses.
 
Now that you understand the fundamentals of what is NIRVIK scheme, let us move on to the scheme's objectives.
 

NIRVIK Scheme- Objectives

 

• The scheme will assist small exporters in boosting their export volume by allowing for higher credit disbursement.

 

• NIRVIK will provide small exporters with insurance cover to help them easily expand their businesses.

 

• It will support exporters to lower their insurance policy premiums. 

 

• The scheme will streamline and simplify the claim settlement process, freeing up time for businesses to focus on their core competencies.

 

• The Indian government’s aim is that the NIRVIK scheme will create a healthy business and work environment, while promoting numerous job opportunities in the country.
   

• The scheme will assist small-scale exporters in expanding their operations.

 

NIRVIK Scheme- Eligibility Requirements

 
In order to be eligible for this scheme, applicants must meet the following requirements.
 

• The scheme can be availed only by small-scale export businesses.

 

• The owner of the export business must be an Indian citizen.

 

• The export business must possess an active bank account in India.

 
Also Read: List of Benefits to Start-ups by the Indian Government
 

Features and Benefits of the NIRVIK Scheme

As previously discussed, the primary goal of the NIRVIK scheme is to assist small and medium-sized exporters in growing their businesses. Given this, some of the scheme's key features are as follows:
 

• Easy availability of funds

  The scheme would ensure that the exporter can apply for funds with any reputable lender without difficulty. The application process under this scheme is not overly complicated.
   

• Affordable interest rates

  Exporters can apply for business loans at an annual interest rate of 7.6% under this scheme.
   

• Lower insurance premiums

  The insurance premium rates for accounts with a limit of less than Rs 80 crores have been kept at 0.6% per annum under the NIRVIK scheme. Premium rates will be 0.72% per annum for accounts with a limit of more than Rs 80 crore.
   

• Higher coverage

  The NIRVIK scheme will assist exporters by providing insurance coverage of up to 90% on both the principal loan amount and the interest component.
   

• Tenure

  According to the ministry responsible for the NIRVIK scheme, once launched, this plan will run for five years in a row.
   

• Sectoral limits

  Export businesses in the gems and jewellery sector with account limits of more than 80% will be charged a higher premium than other exporters. The reason for this is a higher loss ratio.
   

• Loss provisions

  If the exporter suffers a loss of over Rs 10 crores, the ECGC will investigate the business’ finances. Following this, as the outstanding principal and interest component is covered by insurance, the financial institution will pay the monthly premium to the ECGC.
   

• Low forex rates

  The NIRVIK scheme will benefit exporters by keeping the foreign exchange rate between 4% and 8% or less.
   

Documents required to apply for NIRVIK scheme

 
In order to register under the NIRVIK scheme, an export business must provide the following documents:
 

• Individual identity proof is required for each owner, whether the export business is owned by a single person or a partnership firm.

 

• Business PAN card bearing the name of the exporting firm.

 

• Exporters, regardless of industry, must have a business registration certificate. This document ensures the legitimacy of the exporting firm.

 

• Exporters will also require a GST certificate. In the absence of this document, it is recommended to apply for it with the Goods and Services Tax department.

 

• If the export business has availed a secured loan, its owners must submit the loan-related documents.

 

• Exporters will be required to submit the insurance-related documents at the time of claim settlement.

 

How to apply for the NIRVIK scheme?

 
The government of India has yet to announce a launch date for the NIRVIK scheme. As a result, the specifics of the application process are still unknown. But, as soon as there is an update, we will provide all the necessary information to help you apply for this scheme.
 
Also Read: Top Government Business Loan Schemes in India
 

To conclude

 
The Indian government’s aim behind implementing the NIRVIK scheme is to grow the contribution of the export sector in the country’s GDP. However, if you are an experienced exporter, you need not wait for this scheme to access funds for your business. Hero FinCorp's business loan can help you secure funds of up to Rs 25 lakhs at a low business loan interest rate.