Micro small and medium enterprises have a shortage of funds but have to meet a lot of expenses like for buying machinery, plant, equipment, raw materials, inventory, paying salary, managing cash flow, for working capital expenses and much more. They cannot manage everything on their own and over that financial institutions prefer to lend money to large companies as there is a low risk as compared to lending to MSMEs. Due to inadequate finance over one-third of the MSMEs shut down after one year of incorporation. To overcome these stumbling blocks, the Government has introduced various schemes to provide financial needs to these enterprises.
The various loans provided by the Government of India for micro small and medium enterprises are as follows:-
This scheme is launched by the Indian government to provide loans upto 1 crore for working capital requirements. The best part of this scheme is that you will get a loan in just 59 minutes at an 8% rate of interest. Here are the quick steps by which you can get loan under this scheme:-
- Enter your GSTIN (Goods and service tax identification number)
- In XML format upload your income tax return.
- In PDF format upload the current bank account statement of the last six months.
- Enter the details of the business owner.
- Summit application.
Sit back and relax. Your loan would be sanctioned in less than an hour.
After envisaging the idea of “funding the unfunded” and then putting into action, the current government introduced Micro Units Development And Refinance Agency Business Loan. A scheme to provide financial support to start-ups and MSMEs. There are three subheads under this scheme:-
- Shishu Loan:- Finance up to Rs. 50,000 can be availed.
- Kishor Loan:- Amount up to Rs. 5,00,000 can be financed.
- Tarun Loan:- Upto Rs. 10,00,000 can be sanctioned as loan.
MUDRA cards have been recently introduced by the Government to facilitate easy funding. Against your loan, this debit card is given. You can withdraw multiple times from your MUDRA account up to the limit of loan sanctioned to you. You have to pay interest only on the portion of the loan that you use.
This scheme was introduced 18 years back to provide collateral-free loan upto 10 lakh to micro small and medium enterprises. By empaneling as a lending authority any regional rural banks and commercial banks can be a part of this scheme.
National Small Industries Corporation subsidy scheme offers two type of funding they are:-
- Raw material Assistance:- This scheme covers funding for both indigenous and imported raw materials.
- Marketing Assistance:- This scheme can be availed to enhance your competitiveness and market value.
Any micro small and medium enterprises having Udyog Aadhaar Memorandum is eligible to register for the loan under this scheme.
An enterprise who is engaged in manufacturing, trading or any service business can avail this loan. This scheme is inclusive of both working capital and long term loan. Stand-up India scheme is specially designed to support scheduled Caste, Scheduled Tribes and women entrepreneurs.
A scheme launched by the Government of India to provide loans to both new and existing enterprises who are engaged in retail trade, educational institutions, self-help groups, training institutions or service activities. The guarantee cover is a maximum of 85% of the sanctioned amount by the credit facility. One per cent per annum of the amount sanctioned is charged as fees.
Credit Linked Capital Subsidy Scheme is launched by the Ministry of micro small and medium enterprises to provide funds for up-gradation of technologies, especially in rural and semi-urban areas. 15% subsidy can be availed on the investment on notified machinery, plant and equipment. The maximum subsidy that can be availed is up to 1 crore. This scheme helps to reduce the burden of micro small and medium enterprises and manufacture high-quality products with better machines and equipment.
Need financial aid then do avail these loans that are offered by the government especially for you.
By Vanshika Tandon