Coir Udyami Yojana

As an MSME owner, tapping into traditional sectors with strong growth potential like the coir industry can be a promising venture. Recognising the significant role of coir and coconut-based products in rural employment, the Ministry of MSME launched the Coir Udyami Yojana. The scheme is attempting to modernise and scale technology adoption in the coir sector. It is designed to encourage you, especially if you are from rural areas or belong to weaker sections, to set up or expand coir processing units with government-backed financial support and guidance.

What is Coir Udyami Yojana?

The Coir Udyami Yojana was originally introduced as the “Rejuvenation, Modernization and Technology Upgradation of the Coir Industry” scheme and later renamed. The updated scheme has been in operation under this new name since 2012, functioning as a Central Sector Scheme under the Ministry of MSME, implemented by the Coir Board.

Objectives of Coir Udyami Yojana

• Modernising the coir industry by promoting the adoption of advanced production and processing technology.
• Improving productivity, quality, and diversification of coir products.
• Increasing efficiency to increase earnings for you and your workers.
• Encouraging the use of coconut husk for more coir fibre and products.
• Generating rural employment, often favouring women and weaker sections.
• Empowering women in rural coir sectors and uplifting socio-economic conditions.
• Promoting inclusive growth for SC/ST and North Eastern Region beneficiaries.
• Attracting rural youth to the coir sector through skilling and entrepreneurship training.
• Supporting backward and forward linkages for steady business growth.

Key Features of Coir Udyami Yojana

• The scheme supports only new coir production and processing units.
• The maximum eligible project cost is ₹10 lakh plus working capital, not exceeding 25% of the project cost.
• Your minimum contribution is 5% of the total project cost.
• The bank credit will amount to 55% of the project cost.
• You receive a government subsidy of 40% on the project cost (excluding working capital).
• The rate of interest charged by banks will be at par with their base rate.
• The repayment period is a maximum of 7 years, with a moratorium according to the sanctioning bank’s norms.
• No collateral or third-party guarantee is required for the loan as it is covered by the Credit Guarantee Trust Fund Scheme.
• You are allowed only one sanctioned project per family (self and spouse).
• It is administered by the Coir Board under the Ministry of Micro, Small, and Medium Enterprises (MSME). The scheme focuses on promoting the coir industry and improving its infrastructure to meet the growing demand for coir products.

Financial Assistance Offered Under the Scheme

Under the Coir Udyami Yojana, you get composite financial assistance comprising:

Additional Points:

• Maximum eligible project cost: ₹10 lakh + working capital (up to 25% of project cost; subsidy not available on working capital).
• Subsidy is routed through identified nodal banks to your bank account.
• Assets created must be insured by you.
• Loan can be a composite loan (term loan plus working capital); working capital loan is not considered for subsidy.
• Scheme covers the capital expenditure required for the establishment of machinery and worksheds, providing support to individuals, companies and other organisation involved in the coir sector

Eligibility Criteria for Coir Udyami Yojana

Eligibility

• To apply for financial assistance, you must meet these conditions:
• You are an Indian citizen aged 18 years or older.
• You can apply as an individual, company, SHG, NGO, registered institution, cooperative society, joint liability group, or registered trust.
• You have not already received a government subsidy for the same purpose under any other central or state scheme.
• Only one application is allowed per family (self and spouse).
• The unit must be new and focused on producing coir fibre, yarn, or value-added coir products.
• Open to any Indian citizen above 18 years and there is no income ceiling for eligibility
• Intended for projects related coir sector such as coir fiber, yarn and other coir based items
• Eligible entities include individuals, self help groups (SHGs), companies, production cooperatives, NGOs and charitable trusts
• Applicants must not have already availed a government subsidy under any other scheme of the Government of India or the State Government for the same purpose.

Non-eligibility

You are not eligible if:

• You have already availed of any central/state subsidy for a coir unit for the same purpose.
• You plan to set up a unit not engaged in coir production or processing.
• You or your family member has already received benefits under this scheme.
• Your application involves inflated costs or multiple projects under different names from the same family.

Documents Required for Coir Udyami Yojana

• Proof of age and identity (Aadhaar, voter ID, etc.)
• Proof of citizenship and address.
• Detailed project report.
• Caste or community certificate (for reserved category applicants).
• Registration/incorporation certificate (for institutions, NGOs, SHGs).
• Bye-laws of institution (if applicable).
• Bank account details.
• Any additional documents as specified by the Regional Office or DIC.

How to Apply for the Coir Udyami Yojana

Step 1: Collect the application form from any Coir Board office, District Industries Centre (DIC), or download it from the official Coir Board website.

Step 2: Fill in the application form completely, attaching all the required documents such as your identity proof, project report, caste/community certificate (if applicable), and any other supporting papers.

Step 3: Submit your filled application and attachments to the relevant Coir Board Field Office or DIC that has jurisdiction over your area, as per the official list provided in the scheme guidelines.

Step 4: Your application will be forwarded to the Regional Level Selection Committee. This committee includes representatives from the Coir Board, DIC, sponsoring banks, and Panchayati Raj Institutions. They will review, verify, and shortlist your application based on eligibility and viability.

Step 5: If your application is recommended, it will be forwarded to a participating bank for credit appraisal and loan sanction. The bank will inform you of the loan sanction or rejection within 60 days.

Step 6: After the bank sanctions your project, deposit your 5% beneficiary contribution in the bank within 30 days of receiving the sanction letter.

Step 7: Once your contribution is verified, the bank will release the first instalment of the project loan to you within 30 days.

Step 8: The government subsidy is released through the nodal bank into your loan account as per project milestones, after ensuring loan disbursement for capital expenditure and verification of progress.

Step 9: Set up your coir unit and ensure all assets created under the scheme are properly insured. Complete any additional post-sanction compliances or formalities as instructed by the authorities.

Benefits of Coir Udyami Yojana

• Modernisation Support
  You get financial and technical assistance to set up a coir unit with modern equipment and processes, improving efficiency and output.
• Employment Generation
  You can create sustainable employment, especially for women and the rural workforce, strengthening local economies.
• Inclusive Growth
  The scheme supports you specifically if you belong to SC, ST, or the North Eastern Regions, ensuring equitable progress across communities.
• Collateral-free Loan
  You benefit from credit support without the need to pledge collateral or third-party guarantees, reducing entry barriers for new entrepreneurs.
• Business Linkages
  It also helps you build backward and forward linkages, connecting you with suppliers, buyers, and support services for sustained business growth.

Real-World Examples of Coir Udyami Yojana

• Anees Ahmed, Chennai - Founder of Global Green Coir, he turned coconut husks into coco peat, transforming waste into an internationally demanded, eco-friendly product. His company now reportedly earns ₹75 crore annually through exports
• Prabhakaran Kaliappan, Pollachi - Founder of Green Globe Export, he produced eco-friendly coco peat bricks, grow bags and coir pots. Today, it's a multi-crore business with an estimated annual turnover of ₹25 crore.
• Traditional coir cooperatives in Alappuzha—once focused on rope and mats—have expanded into exports of geotextiles, erosion control textiles, and garden substrates, serving markets across Europe and the Middle East.

Related Government Support Plans with Coir Udyami Yojana

Final Words

If you are looking to establish a competitive, tech-driven MSME in the coir sector, the Coir Udyami Yojana gives you both a financial boost and a platform for sustainable success. The application process is transparent, and the scheme is designed for MSMEs that want to modernise with minimum risk and maximum government support.