Nabard earmarks Rs100 cr to lend to VCFs

Nabard earmarks Rs100 cr to lend to VCFs

Mumbai: In a bid to boost innovative agri start-ups and rural enterprises, the National Bank of Agriculture and Rural Development (Nabard) has earmarked 100 crore to be lent to venture capital funds, which have a mandate to invest in such companies, a senior official said.

“We want to encourage entrepreneurship in existing or new activities leading to agricultural facilities and rural development. We have decided to make contributions to professionally-managed VCFs having exposure to agriculture and rural sectors," a senior Nabard official told PTI.

The apex development bank, has earmarked 100 crore for the purpose, he said.

“The initiative has been taken primarily to give a fillip to sustainable and equitable growth in agriculture and agro- -processing in rural areas," he said.

The main objective of this (investment in VCFs) is to complement and broad-base the existing refinance and co- finance products and other developmental initiatives of Nabard, the official said.

This is for the first time that Nabard would be investing in and outside venture capital fund. “Nabard has its own VCF scheme for development of dairy and poultry.

But this is for the first time that we will be investing in professionally managed VCF for development of agriculture and service sectors in rural areas," he said.

Under the new scheme, Nabard’s contribution should not exceed 10% of the corpus fund of the VCF, the period of which should not exceed 10 years.

A fund would be considered eligible if it plans to invest at least 50% of the corpus in projects that would help in agriculture and rural development, he said.

The scheme necessitates that the start-up units or existing units, to be supported by the venture capital, should preferably be set up in rural areas.

“If the units are set up outside such area, then the goods and services produced by them should be benefiting the rural areas either directly or indirectly," he added.

The official said that it has received proposals from six VCFs till now.