Schemes->Arms to Farms  (SEMFEX - II)

Self- Employment for Ex-Servicemen-- From Arms to farms


            The Scheme promoted with the assistance of NABARD for Ex-Servicemen in order to provide finance for setting up of village, cottage, tiny and small scale industries. The scheme SEMFEX-II has two sub-schemes  (1) Farm Sector and (2) Non-farm Sector.                                                      

 Special features of SEMFEX II scheme are given below:-

(a)                 No margin money is required to be contributed by the promoters for projects with an outlay of Rs.50,000/- under non-farm sector. In addition to composite loan of Rs.50,000/-, a separate loan for construction of workshed with a minimum of Rs.3,000/- upto Rs.12,500/- is available to the borrowers in case of need under the scheme. The cost of construction of workshed could also be covered under Composite Loan Scheme and Integrated Loan Scheme.

 (b)                In respect of non-farm sector schemes, soft loan assistance for meeting margin money requirements will be provided.

 (c)                  For expeditious sanctions, projects costing upto Rs.50,000/- both in farm and non farm sectors will be cleared by the financial institutions in the district within one month of submission of loan application and project report.

 (d)                 In some States, Ex-servicemen Development Corporations have been constituted. NABARD will be prepared to refinance projects for infrastructural support for ex-servicemen through the existing and other Ex-servicemen Development Corporations as and when established under the State aegis. Such corporations must have Government permission to borrow money from banking institutions.

 (e)                 No additional security will be required for obtaining the Soft Loan Assistance available under the scheme. In respect of term/composite loans, no collateral security other than hypothecation of assets acquired with the financial assistance, will be insisted upon upto Rs.25,000 or as may be decided by the RBI from time to time.

 (f)                  With a view to assisting Ex-Servicemen in preparing project reports for undertaking activities pertaining to agriculture and allied activities. NABARD will make available model schemes for some of the major activities such as dairy, fisheries, sheep/goat rearing etc. to all Zila Sainik Boards (ZSBs).

 (g)                 NABARD has introduced schemes for funding voluntary/ promotional agencies for establishment of training-cum-production centres(TPCs). The Zila Sainik Board/Rajya Sainik Boards or other welfare agencies of ex-servicemen, may avail of the facility for opening such centres for vocational training of ex-servicemen.

 (h)                 Under the scheme, participation of civilians along with ex-servicemen will also be permitted subject to the condition that the share of the civilians in the promoters contribution as well as in the benefits of the enterprise does not exceed 25% of the project cost.

 Loan Amount

(a)                Farm sector - No upper ceiling is prescribed for loans under Farm Sector.

 (b)             Non-Farm Sector Ė Financial assistance is available for projects upto Rs. 10 lakhs for setting up industrial units/service establishments generally. The ceiling of Rs. 10 lakhs will not be applicable in the case of units relating to agro-industries and non-agro industries satisfying the limit of SSI, in so far as it relates to investment in plant and machinery for availing assistance under project finance scheme.

Source of Funds

 The project cost under Farm and Non-Farm Sectors will be financed through (i) Promoterís contribution, (ii) Soft loan assistance (iii) Term loan. The promoterís Margin Money could also be financed to the extent of 100% of shortfall. Normally the promoterís contribution, under Farm and Non-Farm Sectors is as per the details given below.

 Margin Money

 (a)                 Non Farm Sector Ė Promoterís contribution for units with financial outlay upto Rs. 10 lakhs for Non-Farm Sector will be as under :

  Loan Amount                                     Promoterís Contribution

  (i)      Loans upto Rs.50,000                                     Nil

(ii)       Above Rs.50,000 & upto Rs. 1.00 lakh           5%

(iii)      Above Rs.1.00 lakh & upto Rs.10.00 lakhs    10%

  Promoterís contribution for agro-industries upto SSI limit will be 12.5% and in case of other non-agro SSI units, it is 25%. Promoterís contribution for loan to Small Road Transport operators (SRTOS) is 15%.

        (b)  Farm Sector -  For Farm Sector advances, the promoterís contribution will be as under:


Category of Farmers                Promoterís Contribution

I.                    Land Based Activities


(i)        Small Farmers (SF)                            5%

(ii)       Medium Farmers (MF)                       10%

(iii)      Other Farmers (OF)                            15%



            Ex-Servicemen, war widows, widows of Ex-Servicemen and disabled service personnel, will be eligible to receive assistance under the scheme, provided they are Registered with ZSBs. Where no ZSBs are established, he/she should be registered with RSBs. Those not registered, will be required to do so before their applications are entertained.


 Eligible persons desirous of getting assistance, will have to apply to the concerned ZSB/RSB, in the prescribed form. Five copies of the application will be submitted by the applicants.


There is no age restriction for availing of loans under Farm and Non-Farm sector.


            An applicant, satisfying the conditions laid down above, will be registered under SEMFEX II scheme, at the ZSBs/RSBs, in separate Self- Employment Registers. This registration number, will be entered in Part II of the application. For all future correspondence, this registration number will be quoted.

 Contact person:

i)          Director Sainik Welfare, Department of Sainik Welfare, Jammu 180 005

 ii)        General Manager,  National Bank of Agriculture and  Rural Development (NABARD)  F-1794,  Shastri Nagar Extension, Jammu/Sgr.


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