Approximately sixty thousand Armed Forces personnel retire every year in the country at a comparatively young age. It is a matter of great concern for the Ministry of Defence, Government of India and the state governments to assist the retired defence personnel in their resettlement. The ex-servicemen have necessary skills, dedication, capacity to work-hard and commitment to achieve results. If proper opportunities are provided to them, they can become a cataylst to economic growth of the country. The Directorate General Resettlement (DGR), Ministry of Defence has the over-all responsibility for the resettlement and rehabilitation of ex-servicemen, disabled service personnel, widows of ex-servicemen and their dependents. The DGR helps them by way of employment, self-employment, training in professional and artisan courses and other welfare measures.

In self-employment, avenues lie in manufacturing activities, small scale service establishments, agriculture, tiny, cottage and village industries. The DGR has launched a few self-employment schemes for the resettlement of ex-servicemen and widows. Among the self-employment schemes, SEMFEX-II, SEMFEX-III and National Equity Fund are the prominent schemes.

Financial assistance is available under SIDBI's NEF (National Equity Fund) scheme upto rupees 50 lakh with the benefit of maximum soft loan upto Rs 10 lakh per project with 5 per cent rate of interest per annum. The objective of the scheme is to provide equity type support to entrepreneurs for setting up new projects in small scale sector, SSI and service enterprises and for rehabilitation of viable sick units in the SSI sector which fulfill the specified eligibility criteria. Assistance from NEF helps the small scale unit in strengthening their equity base and thereby improve their acceptability for term financing by primary lending institutions (PLIs).

SEMFEX-II scheme has been promoted with the assistance of National Bank for Agriculture and Rural Development (NABARD). It provides refinance to banks for financing for development of agriculture and allied activities, such as minor irrigation, farm mechanisation, mushroom cultivation, dairy, poultry, sheep and goat rearing, fisheries, plantation and horticulture agri-processing units including food processing, forestry, wasteland development, etc. NABARD supports bio-gas industries, small scale industries, tiny, cottage and village industries handloom and handicrafts and service sector activities in rural areas. Under this scheme, interest free Soft Loan Assistance for Margin Money (SLA-MM) under farm sector is provided. Refinance assistance is also available to transport vehicles. Ex-servicemen Transport Corporation, registered society and other institution can be formed to acquire a maximum of 30 transport vehicles under the SRTO Scheme.

SEMFEX-III scheme has been launched to help rehabilitate the ex-servicemen and widows to undertake rural industries. The scheme is operative in collaboration with the Khadi and Village Industries Commission. There are 110 rural industries including service sector activities which have been identified viable for financing to ex-servicemen and widows. Under this scheme ex-servicemen will be considered as a special target group and their loan cases will be sanctioned on preferential basis. The facility of margin money grant will be at the rate of 30 per cent of the project cost upto rupees 10 lakh and above this amount upto rupees 25 lakh it will be 10 per cent of the remaining cost of the project. It means that an amount of rupees 3 and 4.5 lakh would be provided as grant subsidy for the loan amount of rupees 10 and 25 lakh respectively.

The borrower would be required to invest his own contribution (5 percent) of the project cost and the remaining 95 per cent of the project cost would be sanctioned by the KVIC/KVIB/banks. All the schemes within the purview of KVIC are financed through the State Khadi and Village Industries Boards or banks but in some cases the project can also be directly financed by the KVIC head officer, Mumbai. However, such cases will be admissible only after prior approval from KVIC. In case of bank finance scheme the KVIC has already placed a lumpsum deposit of margin money in advance with the corporate officer of each bank of a nodal branch designated by the bank in savings bank account in the name of KVIC. The lending institution would be fully responsible for recovery of consortium bank credit.The ex-servicemen can also avail free training facilities at the KVIC training centres.

Eligible ex-servicemen and widows desirous of getting loans will have to apply to the concerned Zila Sainik Board/Rajya Sainik Board (ZSB/RSB) on the prescribed form.