New Delhi: The Union Cabinet on Wednesday approved a new Scheme for Formalisation of Micro food processing Enterprises (FME) for the Unorganized Sector amounting to Rs 10,000 crore. 


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The expenditure will be shared by government and the states in 60:40 ratio, an official release said.


The scheme aims to Increase in access to finance by micro food processing units with special focus on women entrepreneurs and Aspirational districts. It also lays focus on minor forest produce in Tribal Districts.


The Scheme will be implemented over a 5 year period from 2020-21 to 2024-25. 2,00,000 micro-enterprises will be assisted with credit linked subsidy.


Micro enterprises will get credit linked subsidy of 35% of the eligible project cost with ceiling of Rs 10 lakh. Beneficiary contribution will be minimum 10% and balance from loan.


Seed capital will be given to of Rs 4 lakh per SHG will be given for loan to members for working capital and small tools.


Grant will be provided to FPOs for backward/forward linkages, common infrastructure, packaging, marketing & branding.


Strengthening this segment will lead to reduction in wastage, creation of off-farm job opportunities and aid in achieving the overarching Government objective of doubling farmers' income, an official release said.