Interest Subsidy Eligibility Certificate (ISEC)

Natural produce is a definitive way of increasing one’s economy. Khadi is one such commodity that sits as India’s most untapped potential, and the Government has now taken heed to rejuvenate it. 

The Interest Subsidy Eligibility Certificate or the ISEC is a scheme which is an important funding mechanism for khadi programs which are undertaken by various khadi institutions. 

The scheme was introduced to mobilize funds from banking institutions from across the nation to fill the gap between the actual fund requirement and the availability of funds from various budgetary sources. 

Salient features of the ISEC

  1. Under the ISEC scheme, the credit would be collated at a concessional rate of interest of just 4% per annum. This concessional Rate of Interest would be on working capital and would be made available as per the requirement of the institution. The difference between the actual lending rate and the subsidized 4% is paid by the Central Government through the KVIC to leading banks all across the country. 
  2. While approving the continuation of the scheme for the sole purpose of implementation during the XII plan period, the Government of India has approved a succinct and unified version of the scheme for the enhancement and propagation of the Khadi and polyvastra. The scheme aims to facilitate the seamless release of interest subsidy to the institutions. 


In order to avail of the scheme, the khadi institutions need to have valid khadi certificates and sanctioned khadi program in place. The institutions need to be registered with the KVIC / State Khadi and Village Industries Boards to avail of financing under the ISEC scheme. This is because the scheme only supports the Khadi and polyvastra sector. 

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