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Pavala Vaddi Scheme

Objective:To provides interest subsidy on the loans taken by the Self Help Groups and to reduce the financial burden on them
Pavala Vaddi Scheme is an interest subsidy scheme started during 2004-2005 and is applicable to all loans extended by banks on or after 1st July 2004, under SHG Bank Linkage Programme. The incentive will be in the form of reimbursement of interest whatever is above 3% interest irrespective of bank interest rates and will not include penal interest, liquidated damages etc., paid to the bank. Benefit will be available for a period of 5 years.

The scheme can be utilized by new Micro and Small Enterprises setting up in Andhra Pradesh and Telangana States except in the Municipal Corporation limits of Visakhapatnam, Vijayawada and Hyderabad. This scheme will also be extended to new units which are already established and promptly and regularly repaying the loan installments of principal and interest.
Mode of reimbursement
The interest amount paid by the eligible Micro and Small enterprises to the financial Institution/Banks on the Term loan availed will be reimbursed with a maximum limit of 9% on Half-yearly basis to the concerned Financial Institutions or Banks.
Process :
1. The DRDA will obtain the details of SHG repayment for the purpose of interest subsidy twice a year though the Mandal Samakhyas.
2. DRDA will calculate the Pavala Vaddi to be given to each SHG basing on the bank statement. The DRDA will give the Pavala Vaddi Cheques to the Mandal Samakhya along with the statement of particulars accruing to each SHG.
3. The Mandal Samakhya in turn will distribute the cheques to the SHGs through the Village Organisations in the Presence of non-officials.

Reference :- http://industries.telangana.gov.in/Library/go%20ms%20no.42Incentives.pdf ( refer 5.11.4 )

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One comment

  1. Respected Sir / mam ,

    I have taken a loan amount of 50000 under pavala vaddi scheme in 2014 under UNITED BANK OF INDIA , NEW VASVI NAGAR BRANCH , KARKHANA , SECUNDERABAD 09 and repaying the EMI as 1750 Principle + interest , As said for 36 months .
    MY problem is my and the bank calculation of my loan repayment EMI gets completed in the Month November ,
    But the Agent is telling us to pay more 9 EMIs .

    Not able to understand , whom to complaint , please guide , & reply on my mail id .

    Thanking you
    Abida begum

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