KVIC Loan: Explore Features and Objectives

Learn how KVIC promotes khadi, generates employment, preserves traditional skills, and contributes to sustainable economic growth in India.
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2 min read
25 February 2025

What is KVIC (Khadi and Village Industries Commission)?

The Khadi and Village Industries Commission (KVIC) is a non-constitutional body set up under an Act of Parliament passed by the Government of India. KVIC's main goal is to plan, promote, support, organise, and help in the growth of Khadi and village industries in rural areas. This article will explain in detail the various schemes organised by the Khadi and Village Industries Commission (KVIC).

Important facts about KVIC for UPSC Prelims

Key Aspect

Details

Full-Form of KVIC

Khadi Village and Industries Commission

Year of Founding

1957

Commission Type

Statutory Body

Ministry Oversight

Ministry of MSMEs

Incorporation of

All India Khadi and Village Industries Board

Official website

https://www.kvic.gov.in/

Functions of KVIC

The Khadi Village and Industries Commission performs the following functions:

  • Planning, promoting, organizing, 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.

Role of Khadi Village Industries Commission in the economy

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.

Departments of the Khadi and Village Industries Commission

The departments of the Khadi Village Industries Commission (KVIC) include:

Board of directors

The board of directors is the main decision-making authority of KVIC. It consists of 15 members, including the chairman and vice-chairman. The board is responsible for creating policies and strategies for the growth of village industries.

General manager

The general manager serves as the chief executive officer of KVIC, overseeing the implementation of the board's policies and strategies. The general manager is supported by a team of officers and staff.

Zonal offices

Zonal offices are situated in major cities across India and provide financial and marketing support within their specific regions.

State offices

State offices are established in every state of India and are responsible for coordinating the activities of zonal offices and district offices.

District offices

District offices are located in all districts of India, offering direct support to village industries within their local areas.

Key objectives of KVIC

The objectives of KVIC are as follows:

  • Primary objective: To develop an active rural community
  • Social objective: To create employment opportunities in rural areas
  • Economic objective: To produce products that can be sold
  • Wider objective: To promote self-reliance among economically weaker sections of society

KVIC Schemes and Programs

KVIC has implemented various schemes and programs to achieve these objectives. Some notable ones include:

  1. Prime Minister's employment generation programme (PMEGP): This flagship program aims to generate employment opportunities by promoting micro-enterprises. It provides financial assistance for setting up new ventures and expanding existing ones.
  2. Honey Mission: Under this initiative, KVIC promotes bee keeping activities, creating avenues for honey production and related products. This not only boosts the income of bee keepers but also contributes to agricultural pollination. Businesses operating in multiple regions may find it helpful to refer to the GST state code for tax filing across state boundaries.
  3. SFURTI (scheme of fund for regeneration of traditional industries): SFURTI is designed to enhance the competitiveness of traditional industries and artisans. It focuses on cluster development to improve infrastructure, technology, and market access.
  4. Rebate on Interest for women entrepreneurs: KVIC provides a rebate on interest rates for women entrepreneurs engaged in khadi and village industries, encouraging their active participation in economic activities. To stay compliant, entrepreneurs can file their taxes through GST return systems, which ensures smooth operation of their enterprises.

KVIC provides a user-friendly digital platform for individuals and entrepreneurs to access information, schemes, and resources offered by the Khadi and Village Industries Commission (KVIC). Through KVIC online, applicants can explore KVIC loan programs, such as the Prime Minister's employment generation programme (PMEGP), facilitating convenient application processes and tracking. These loans allow aspiring entrepreneurs to establish or expand micro-enterprises, fostering employment and economic development. KVIC's online initiatives streamline access to financial assistance, promoting inclusivity and applying technology to support the growth of khadi and village industries across India.

Features of KVIC

Some of the notable features of KVIC are:

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

Eligibility criteria for KVIC Loan

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.

How to avail loans from banks under the KVIC scheme

  1. Visit the KVIC website at https://www.kviconline.gov.in/pmegpeportal/jsp/pmegponline.jsp
  2. Complete the online application form provided. Input your personal details including name, Aadhaar Number, date of birth, address, bank information, business particulars, etc.
  3. Save the application after filling it out.
  4. Upload necessary documents such as passport-sized photo, Aadhaar card, population certificate, EDP training certificate, and higher education certificate.
  5. 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.

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Frequently asked questions

What is the KVIC scheme?

KVIC or the Khadi and Village Industries Commission is a statutory body established by the Indian government for the development and promotion of khadi and other village industries. KVIC is also responsible for providing various schemes and subsidies for the establishment and promotion of small-scale rural industries.

What is the full form of KVIC?

The full form of KVIC is Khadi and Village Industries Commission.

What is the interest rate of KVIC loan?

The interest rate for PMEGP loans and KVIC aligns with the standard rate applicable to MSME enterprises. Currently, most banks charge rates starting from 1.25% per month. However, under ISEC, the rate is fixed at 4%. The difference between this concessional rate and the actual rate is covered by the commission through the "Grants" budgetary allocation. This benefit is exclusively available to Khadi and Polyvastra manufacturers.

What are the benefits of KVIC?

KVIC (Khadi and Village Industries Commission) offers economic empowerment and sustainable development through employment generation and promoting rural entrepreneurship. It preserves traditional crafts, provides financial assistance, facilitates market access, and offers skill development programs. Supported by the government, KVIC plays a crucial role in uplifting rural economies and preserving cultural heritage.

How to apply for loans under KVIC?

Prospective borrowers can seek loans from KVIC by directly contacting the commission.

 What is Digital KVIC?

Digital KVIC refers to the online initiatives launched by the Khadi and Village Industries Commission (KVIC) to promote khadi and village industries through digital platforms. It includes the use of e-commerce websites, social media, and mobile apps to reach a wider audience, increase sales, and streamline operations for better efficiency and transparency.

What is the role of KVIC in business?

KVIC plays a crucial role in supporting and developing small-scale village industries and businesses in India. It provides financial assistance, skill development training, and marketing support to artisans and entrepreneurs. By promoting traditional crafts and sustainable practices, KVIC helps create employment opportunities and boosts rural economic growth.

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