In a true sense, India is the biggest emerging market in the world with such a large population comprised of skilful, talented and innovative minds. A large section of the Indian population is engaged in micro, small and medium enterprises of the country and these enterprises are the fastest growing sector in India. It contributes around 40% of the total GDP and also is the biggest contributor in providing employment to a large section of the Indian population.
Micro, Small and Medium enterprises remains a very crucial part of our economy. Being, one of the vital components- The Government Of India in the post-demonetization era came up with new business loan schemes to finance this sector and encourage more people to join it.
Here are the various loan schemes introduced by the Government of India-
1. MUDRA LOANS
Micro-units Development and Refinance Agency (MUDRA). This organization is developed by the Government Of India to offer business finance to micro-business units and to encourage the entrepreneurs of the country. The loans under the scheme are given on the pretext of ‘funding the unfunded’. Small companies and micro-units are often left behind in financing, with this initiative the government has created the concept of low-cost credit to such undertakings. These loans are also known as refinanced business loans. It is approved for both private and public sector banks, co-operative societies, small banks, scheduled commercial banks that come under the scheme.
Structure of MUDRA Loans-
- Sishu Loans- 50,000/-
- Kishor Loans 5,00,000/-
- Tarun Loans 10,00,000/-
Objectives of MUDRA Loan-
- To build a suitable system to grow these businesses by providing finance.
- To set-up a good method of using the last-mile credit agent scheme system to small and Micro businesses.
- To make a good Credit Guarantee system
- To ensure a businessman that the business won’t be a failure.
- Registering all the Microfinance institutions and agencies to evaluate the performance rating.
Who can apply for this loan?
Any citizen residing in India who is interested in the business of non-farming sector such as manufacturing, trading or service sector and whose credit need is less than 10 lakh.
For availing this loan, a person can approach a Bank, MFI, or NBFC for availing of MUDRA loans under Pradhan Mantri Mudra Yojna.
2. Credit Link Capital Subsidy Scheme for Technology Upgradation
This loan covers the most important issue and aspect of micro and small unit enterprises that of technology upgradation. Many such enterprises lack new and updated technologies which take them backwards and hindrance their overall growth. This scheme aims at addressing this important issue. This scheme allows small businesses to upgrade their process by financing technological upgradation. The technological upgradation can be related to numerous processes within the organization, such as manufacturing, marketing, supply chain etc. With this scheme, the government aims to reduce the cost of production of goods and services for small and medium enterprises.
- To facilitate technology upgradation by providing upfront capital subsidy to micro and small enterprises, khadi, village and coir industrial units, for induction of well established and improved technologies in the specified sub-sectors/product.
- To encourage digital India scheme and introducing the latest technology so that people from different parts of the country can have access to it.
Who can apply or this loan?
Any businessman who requires loan for upgrading technology for existing Micro, Small and Medium enterprises. It provides 15% of the capital subsidy. for over one crore.
For availing these loans, you need to apply through your Primary Lending Institution as listed in this PDF. You can avail this loan online.
3. MSME Business Loans in 59 Minutes
The loans under this scheme are given for financial assistance and encouragement of MSME growth in the country. Both new and existing business can utilize the scheme for financial assistance up to ₹ 1 crore. The actual process takes 8-12 days to complete, while the approval or disapproval is granted within the first 59 minutes of application. It is a refinancing scheme, wherein five authorized public sector banks will grant the funds. The rate of interest depends on the nature of your business and credit rating. No information has been given on subsidizing the principal amount or interest subvention.
- To encourage businessman to register online.
- To save the time of businessman. It consumed a lot of time, earlier.
- To encourage small scale business to meet their requirements.
Who can apply for this loan?
This loan is for individuals who are willing to expand their existing business. This business can be made available for Rs. 1 Lakh to Rs. 5 Crore in less than 59 minutes.
For availing this loan, one needs to contact any public and private sector banks and Non-Banking Financial Companies (NBFCs).
4. National Small Industries Corporation Subsidy
National Small Industries Corporation (NSIC), is an ISO 9001-2015 certified Government of India Enterprise under Ministry of Micro, Small and Medium Enterprises (MSME). NSIC has been working to promote, aid and foster the growth of micro, small and medium enterprises in the country.
- To encourage the growth of MSME.
- To achieve operational efficiency and self-sustenance
- To upgrade the professional skills of employees
- To provide training skills for skill upgradation of trainees.
Who can apply for this loan?
All the micro and small enterprises that have EM Part II/ Udyog Aadhaar Memorandum. It can be made available to Micro & Small Enterprises who have already commenced their commercial production but not completed one year of existence.