Scheme Sponsor: Ministry of Social Justice and Empowerment

Target Group: Enterprises by Backward Classes

Mode of Assistance: Funding, Incubation and Acceleration

About The Scheme:
The establishment of a Venture Capital Fund for Backward Classes was suggested by the
Group of Secretaries on Education and Social Development. As a result, Venture Capital
Fund for Backward Classes (VCF-BC) was added as a distinct plan under the current Venture
Capital Fund for Scheduled Castes (VCF-SC) scheme, with clearance from the Ministry of
Social Justice and Empowerment. The purpose of the Venture Capital Fund was to encourage
entrepreneurship among the Backward Classes in India by offering them affordable
financing.

Assistance Pattern:
a) Financial assistance upto Rs.5 Crore: Investments up to Rs.5 crore are eligible for
financial support, with funding up to 75% of the total project cost. 25% of the
project’s cost will be paid by the promoters or by government subsidies under various
schemes of the central or state government.
b) Financial assistance above Rs. 5 Crore : This category allows for investments of up
to 50% of the project cost. At least 25% of the project cost must be supported by
promoters or government subsidies, while the remaining 25% can be funded by banks
or other financial institutions.For government subsidies, promoters must contribute at
least 15% of the project cost.

Requirements:
i. The assets of the project being funded/ assisted under the scheme shall be charged
for security. The project assets will include land, building, plant & machinery and
rights on licenses/patents.
ii. Pari-pasu charge on assets with the Banks/FIs in case of the companies applying
for loan with banks/ FIs on case-to-case basis.
iii. 2nd charge of the assets created out of the investment where the 1st charge in held
by the Bank/FIs.
iv. Pledge of Shares held by promoters and forming at least 26% stake and up to
51% of the Issued and Paid-up capital shall be taken. However, the percentage of
pledged shares would be decided on case-to-case basis.
v. In addition to the charge on assets, Post-dated Cheques (PDCs)/ Electronic
Clearing Service (ECS) and promissory notes shall be taken.
vi. Personal guarantees of the promoters along with buyback agreement shall be
entered.
vii. In case no mortgage in the form of project land is available, the borrower may
arrange collateral securities.

Apply on: https://www.ifciventure.com/venture-capital-fund-scheduled-castes-vcf-sc-and-
venture-capital-fund-backward-classes-vcf-bc

More Information on: https://www.vcfsc.in/vcfbc/index.html