NIRVIK Scheme | Meaning, Documents, Process & More

The NIRVIK Scheme – officially Niryat Rin Vikas Yojana – is one of the very important schemes introduced by the Government of India in favor of small-scale exporters. NIRVIK was announced by Finance Minister Nirmala Sitharaman in the Union Budget for 2020-21, with the main objective of easing credit availability and increasing insurance coverage for exporters. The NIRVIK Scheme is an initiative by the Export Credit Guarantee Corporation of India (ECGC)  to free exporters from the hassle of arranging financing and managing risks in international trade. The article deals with the meaning, required documents, features, and procedures for applying for the NIRVIK Scheme.

Understanding the NIRVIK Scheme

The NIRVIK Scheme is designed to offer better insurance to small-scale exporters by reducing the burden of obtaining export credit. Higher coverage, up to 90% on principal and interest, reduces the risks associated with exporting goods. Smaller-scale enterprises find it more useful because they also face the problem of accessing finance and managing credit risk.

Objectives of the NIRVIK Scheme

The primary objectives of the NIRVIK Scheme include:

• Enhancing Credit Availability: The idea is to enhance credit availability for small exporters since this scheme provides them with the benefit of higher insurance coverage.
• Reducing Premium Rates: The premium rates decrease so that the scheme becomes cheaper for the exporters based on the financing it offers them.
• Streamlining Processes: The NIRVIK Scheme has streamlined processes on matters of export credit so that businesses can easily go through their financial requirements.
• Boosting Exports: The program will be harnessed to improve India’s export capability by building the capacity of smaller players, supporting the growth of their exporting businesses.

Key Features of the NIRVIK Scheme

The NIRVIK Scheme comes with several notable features designed to support exporters:

1. High Insurance Coverage: Exporters can cover outstanding credit amounts up to 90% through insurance coverage. It keeps away the potential loss on confirmed export shipments from their account.
2. Competitive Interest Rates: The scheme offers competitive interest rates between 4% and 8%. This makes small businesses more able to control their financing costs.
3. Pre- and Post-Shipment Credit: This scheme includes pre-shipment and post-shipping credits, thereby providing support at all stages of the export cycle.
4. Simplified Claims Process: It has simplified claims procedures to enable them to go about their core business activities without getting interfered with by protracted administrative procedures.
5. Support for MSMEs: The scheme mainly focuses on the support of micro, small, and medium enterprises that will enable them to break the barriers of financial issues and gain the level of competency needed to compete effectively with others at the international level.

Eligibility Criteria

To benefit from the NIRVIK Scheme, exporters must meet certain eligibility criteria:

• Business Size: The scheme is tailor-made for small-scale exporters.
• Citizenship: It is a citizenship requirement; the export business owner should be an Indian citizen.
• Active Bank Account: The business must hold an active bank account in India.

Required Documents

When applying for the NIRVIK Scheme, exporters need to gather several important documents:

1. Identity Proof: One can submit an Aadhaar card or any valid passport to prove identity.
2. Business Registration Documents: Documents that will prove that the business is registered and owned legitimately.
3. PAN Card: PAN card enrolled in the name of the exporting company.
4. GST Certificate:  Original GST registration certificate issued by Goods and Service Tax Network.
5. Insurance Policies: All documents of existing life, health, and accidental Insurance for personal and business coverage.
6. Existing Loan Documents: All documents pertaining to existing loans and documents of any running loan from banks.

Application Process for the NIRVIK Scheme

Applying for the NIRVIK Scheme involves a structured process designed to be straightforward for small-scale exporters. Here’s a step-by-step guide:

Step 1: Check Eligibility

Your business first needs to qualify for the Export Credit Guarantee Corporation of India scheme by meeting all the eligibility criteria set above before your business meets all eligibility criteria.

Step 2: Gather Required Documents

Always collect all necessary documents when filling out the application form. All information from those documents must be accurate and current.

Step 3: Visit the ECGC Office or Website

You may even walk into any office near the Export Credit Guarantee Corporation of India (ECGC) to learn about the application procedure or log on to their website.

Step 4: Fill Out Application Form

Obtain a duly filled-up application form from the ECGC office. You may also download it from their website. Fill up all the application forms accurately.

Step 5: Attach Supporting Documents

Attach all relevant documents and clear, legible copies of the supporting materials when submitting the application form to ensure timely processing.

Step 6: Submit Your Application

Fill out the annexed form with the attached documents and submit it either in person at an ECGC office or through its web portal, if available.

Step 7: Verification Process

After submission, ECGC will scan your application, and the verification procedure will solicit additional information or clarification needed on the application from your end.

Step 8: Approval and Coverage

Once the verification is successful, you will receive confirmation of your application approval, which will cover you under the NIRVIK Scheme.

Benefits of the NIRVIK Scheme

The benefits provided by the NIRVIK Scheme are substantial:

• Access to credit, therefore, empowers small exporters to undertake growth opportunities.
• High insurance coverage reduces the financial risks associated with international trade.
• Lower premiums lead to making it cheaper for businesses to obtain the finances they need.
• By simplifying these processes, exporters can save considerable time and resources, which they can utilize for expansion activities.

Final Thoughts

Now that you have a clear idea of the Niryat Rin Vikas Yojana (NIRVIK) scheme, you can find out how it may benefit your exporting business. Ensure that you collect all documents correctly and, above all, that they meet all standards required by the ECGC before submitting your application. You may, hence, enjoy the fruits of the fruits offered by this scheme — for example, enhanced insurance coverages and lower interest rates on loans — and further strengthen your financial position in foreign markets. Keep up-to-date with any updates or changes in this initiative as you move along the export journey.