5 Government Supported Lending Schemes for Small and Medium Enterprises in India



The small business sector, also known as the small and medium-sized enterprise (SME) sector, accounts for about 40% of India’s total GDP. This sector plays a vital role in increasing employment opportunities in India, but faces stiff competition from private enterprises. Therefore, the Government of India (PI) offers several lending schemes to finance these small businesses. These loans can be used by SMEs to finance their operations, purchase new equipment, expand their business, etc.

Here are the schemes proposed by the government –

State lending scheme for MSMEs – The Government of India has launched this scheme as a working capital loan and MSMEs are eligible for a loan with sanctions of Rs. 1 crore in just 59 minutes. This loan is provided with an interest rate of 8%, so that repayments are easy in the pockets of the recipients. Enter your company GST ID followed by an XML tax return. Upload your bank statement for the last 6 months to your business account. Enter the director’s personal, educational and property criteria and submit an application.

Business loan MUDRA “Under this scheme, small businesses and start-ups receive financial support in the form of low-cost loans. This loan is financed through public and private sector banks. This loan can be used by MSMEs working in the manufacturing, trade and service sectors. This scheme has three subheadings – Sishu Loans up to Rs. 50,000, Kishore loan up to Rs. 5, 00, 000, and Tarun loans up to 10, 00, 000.

Credit Guarantee Fund Scheme for Micro and Small Enterprises – This credit scheme allows financing without collateral for enterprises in the MSME sector. These loans can be provided to both new and existing businesses. The Credit Guarantee Trust Fund was established by the Ministry of Small and Medium Enterprises and Small Enterprises to implement the CGFMSE scheme.

Udyogini – As the name of the scheme suggests, it is a program that was initiated to empower Indian women. Funding under this scheme is designed to support women in meeting their capital requirements for starting a business. The maximum loan provided under this scheme is Rs. 15,00,000. A female entrepreneur must be between 18 and 55 years old. And the annual income of a woman’s family should not exceed Rs. 15,00,000. To apply for a loan, please bring passport-sized photographs, a card below the poverty line, birth certificate, caste certificate, Aadhar card, passbook or bank account, card and income statement.

National Small Industrial Corporation subsidy “The main function of this ISO certified government scheme is to foster the growth of MSMEs through the provision of services, including financial, market, technology and others, across the country. For the IHR, NSIC has initiated two schemes: a. Marketing support scheme. This scheme is vital as MSMEs need to help drive growth in the current competitive marketplace. 2. Credit Support Scheme – Financial assistance is provided for the procurement of raw materials, for marketing activities and for financing in banks through syndication for MSMEs.

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