NDPREM Loan: NORKA Scheme for Returned Emigrants and the Project Report

The NORKA Department Project for Return Emigrants (NDPREM) is the Government of Kerala’s scheme to help Keralites who have returned from abroad start a business. It combines a bank loan with a capital subsidy and an interest subsidy, administered by NORKA Roots through partner banks and financial institutions.

Whether the loan is sanctioned depends largely on the project report. This article explains the scheme, the procedure, and what a project report submitted under NDPREM should contain.

Key features of the scheme

Feature	Details
Who can apply	Keralites who have worked or lived abroad for at least two years and have returned; societies, firms and companies formed by groups of returnees are also eligible
Loan amount	Projects with a loan of up to ₹30 lakh, subject to the bank’s appraisal
Capital subsidy	15% of the project cost, up to a maximum of ₹3 lakh, adjusted against the loan
Interest subsidy	3% of interest for the first four years
Condition for subsidy	Regular repayment, without default, and use of the loan for the sanctioned purpose
Lenders	Partner banks and financial institutions of NORKA Roots, including public sector banks, Kerala Bank and state financial institutions

The scheme terms, subsidy limits and list of partner institutions are revised from time to time. For accurate and current details, contact NORKA Roots (toll-free 1800 425 3939) or check the NORKA Roots portal before applying.

Activities covered

The scheme covers a wide range of small and medium businesses, including:

• Agriculture and allied activities: dairy, poultry, goat farming, fisheries and aquaculture, beekeeping, floriculture and food processing
• Trading: retail and wholesale shops, supermarkets and distribution
• Services: restaurants, homestays, repair and service centres, taxi and transport services, salons, and similar businesses
• Manufacturing: small units such as flour mills, bakeries, furniture and garment units

The activity must be viable, and some activities need their own licences, for example a food business licence from FSSAI, a licence from the local body, or registration with the pollution control board.

Procedure

1. Register on the NORKA Roots portal and select the NDPREM scheme. Choose the partner bank and branch where the loan is to be processed.
2. NORKA Roots verifies eligibility, mainly from the passport, and forwards the application to the bank.
3. Submit the project report and supporting documents to the bank.
4. The bank appraises the project, may interview the applicant and inspect the site, and decides on sanction.
5. After the loan is disbursed, the bank claims the capital subsidy from NORKA Roots. Interest subsidy is released for the first four years, provided repayment is regular.

Documents usually required

• Passport copy, including the pages with visa and exit stamps that show the period abroad
• Aadhaar, PAN and photographs
• Address proof
• Project report
• Quotations for machinery, equipment or vehicles to be purchased
• Ownership document or rent agreement for the business premises
• Licences or registrations already obtained, such as Udyam registration, trade licence or GST registration
• Documents of the entity, where the applicant is a firm, company or society

What a project report under NDPREM should contain

The bank sanctions a loan only when it is satisfied that the business can generate enough cash to repay it. The project report is the document that makes that case. A report that is copied from a template, or that shows profits the business cannot realistically achieve, is one of the most common reasons for rejection or delay. A sound report contains the following:

Section	What it should show
Promoter profile	Experience abroad, skills relevant to the business, and the promoter’s own contribution
Description of the business	The product or service, location, and how the business will operate
Market assessment	Customers, local demand, competition, and the basis for the expected sales
Project cost	Land or building (if any), civil work, machinery and equipment, furniture, vehicles, preliminary expenses and working capital, supported by quotations
Means of finance	Promoter’s contribution, bank loan and capital subsidy, showing how the project cost is funded
Assumptions	Selling prices, capacity utilisation, raw material and staff costs, rent, power and other expenses, with the reasons for each
Projected financial statements	Profit and loss account, balance sheet and cash flow statement for the loan period
Repayment schedule	Instalments of principal and interest, with any moratorium
Ratios	Debt service coverage ratio (DSCR), break-even point and return on investment
Statutory approvals	Licences and registrations needed, and their status

Points banks look at closely

• Realistic sales: projections should start modestly and grow at a rate the market can support. Sales at full capacity from the first year are rarely accepted.
• Working capital: stock, credit to customers and running expenses until the business breaks even. Under-estimating it is a frequent cause of failure after the loan is disbursed.
• Repayment capacity: banks look at the DSCR, the cash available to service the loan compared with the instalments due. Norms vary, but an average DSCR comfortably above 1.5 is generally expected for small business loans.
• Promoter’s contribution: the promoter is normally expected to bring in part of the project cost. The subsidy reduces the loan but does not replace the promoter’s margin.
• Consistency: the figures in the report should match the quotations, the rent agreement and the licences applied for.

Choosing the form of business

Most NDPREM applicants run the business as a sole proprietor. Where two or more returnees join together, or the business is expected to grow, a partnership firm, LLP or private limited company may suit better. The choice affects liability, taxation and how future investment is brought in. See company registration in Kerala and Udyam registration.

Frequently asked questions

Who is eligible for the NDPREM loan?

A Keralite who has worked or lived abroad for at least two years and has returned. Groups of returnees can apply through a society, firm or company.

Is the subsidy paid in cash?

No. The capital subsidy is adjusted against the loan account, and the interest subsidy is credited for the first four years, subject to regular repayment.

Is collateral needed?

It depends on the bank’s policy and the loan amount. Collateral-free lending for smaller loans has been discussed with partner banks, so the current terms should be checked with the bank concerned.

Can an existing business apply?

The scheme is intended mainly for new ventures by returnees. Expansion of an existing business may be considered by some partner institutions, and should be checked with NORKA Roots and the bank.

ചുരുക്കം (Summary in Malayalam)

വിദേശത്ത് കുറഞ്ഞത് രണ്ട് വർഷം ജോലി ചെയ്ത് തിരിച്ചെത്തിയ പ്രവാസികൾക്ക് സ്വന്തമായി സംരംഭം തുടങ്ങാൻ നോർക്ക റൂട്ട്സ് നടപ്പാക്കുന്ന പദ്ധതിയാണ് NDPREM. ₹30 ലക്ഷം വരെയുള്ള വായ്പകൾക്ക് പദ്ധതിച്ചെലവിന്റെ 15% (പരമാവധി ₹3 ലക്ഷം) മൂലധന സബ്സിഡിയും ആദ്യ നാല് വർഷം 3% പലിശ സബ്സിഡിയും ലഭിക്കും. കൃത്യമായി തിരിച്ചടവ് നടത്തിയാൽ മാത്രമേ സബ്സിഡി ലഭിക്കൂ. നോർക്ക റൂട്ട്സ് പോർട്ടലിൽ രജിസ്റ്റർ ചെയ്ത് അപേക്ഷിക്കണം. വായ്പ അനുവദിക്കുന്നതിൽ പ്രോജക്ട് റിപ്പോർട്ടിന് നിർണായക പങ്കുണ്ട്; യാഥാർത്ഥ്യബോധമുള്ള വിൽപ്പന കണക്കുകളും തിരിച്ചടവ് ശേഷിയും റിപ്പോർട്ടിൽ വ്യക്തമാക്കണം.

This article gives a general overview of the NDPREM scheme and of project reports for bank loans. Scheme terms, subsidy limits and bank norms are revised from time to time; for accurate and current information, contact NORKA Roots or the partner bank concerned. The article is not advice on any particular case.