Assignment No.

6
• Visit a bank/financial institution to enquire about various
funding schemes for small scale enterprise.
The small-scale business sector, which is more popularly known as the Small
and Medium Enterprises (SME) sector, is responsible for contributing around
40% to the total Gross Domestic Product (GDP) of India. This sector is a key
source of employment in India but faces stiff competition from privately-funded
businesses. Realizing this, the Government of India has come forward to offer
many loan schemes to finance the small-scale business sector. This loans can be
availed by the SMEs to fund their day-to-day operations, expand their business,
purchase new equipment, etc.

1. SIDBI Make in India Loan for Enterprises (SMILE)

Features:
1. The scheme has been designed to foster innovation, facilitate investment,
protect intellectual property, enhance skill development, and build the best
infrastructure for MSMEs.
2. Under the scheme, loans will be offered in the forms of soft loan and term
loan.
3. MSMEs engaged in 25 selected sectors will receive financial support at
competitive interest rates as part of the ‘Make in India’ campaign launched
by the government of India.
4. New enterprises in the services and manufacturing sector will be given
importance along with an emphasis on smaller enterprises within the MSME.
 Eligibility:
New enterprises on board along with the existing manufacturing and services
sectors can apply for this scheme. Existing enterprises undertaking up-
gradation or starting other projects for expanding their business will also be
covered under this scheme. The maximum loan repayment tenure is 10 years
with 36 months of moratorium period.

Fiscal incentives:
The loan amount offered under SMILE scheme is minimum Rs. 10 lakh and
maximum up to Rs. 25 lakhs.

2. Pradhan Mantri Mudra Yojana (PMMY)

Features:
1. The scheme will extend loans to activities that create employment and
generate income in the areas of services, manufacturing, retail, and
agriculture.
2. No collateral or security need to be provided to avail the Mudra loan.
3. Three types of loans can be availed under Mudra for different stages of the
business, namely, Shishu, Kishor, and Tarun.
4. The loans under the Mudra Yojana will be extended by public sector banks,
private sector banks, cooperative banks, Regional Rural Banks (RRBs),
foreign banks, Non- Banking Financial Companies (NBFCs), and Micro
Finance Institutions (MFIs).

Eligibility:
Non-Corporate Small Business Segment (NCSB) comprising of
proprietorship/enterprise firms in rural and urban areas can apply for the
loan. Here are some examples of NCSBs:
• Small manufacturing units
• Service sector units
• Shopkeepers
• Fruits / vegetable vendors
• Truck operators
• Food-service units
• Repair shops
• Machine operators
• Small industries
• Artisans
• Food processors and others
3. Credit Guarantee Scheme for Micro and Small Enterprises (CGSMSE)

Features:
1. The scheme was launched with an intent to offer collateral-free credit to
the micro and small enterprise sector.
2. Both working capital facility and term loans are eligible to be covered
under the scheme.
3. Under the scheme, guarantee cover can be availed up to 75% of the
sanctioned amount of the credit facility.
For microenterprises seeking a loan of up to Rs.5 lakh, MSEs owned and
operated by women, and loans in the North-Eastern region, guarantee cover
of up to 80% will be provided.

Eligibility:
New and existing MSMEs engaged in manufacturing or service activities,
excluding retail trade, educational institutions, agriculture, Self-Help Groups
(SHGs), training institutions are eligible for this scheme.

Fiscal incentives:
1. This MSME scheme for entrepreneurs includes term loans and/or
working capital loan facility up to Rs. 2 crores, per borrowing unit.
2. The guarantee cover provided is up to 75% of the credit facility up to
Rs. 1.5 crore.
3. 85% of credit facility for loans up to Rs. 5 Lakh is provided to micro-
enterprises.
4. 80% of credit facility for MSMEs owned/operated by women and all
loans to North Eastern Region, including Sikkim.
5. For MSME Retail trade, the guarantee cover is 50% of the amount in
default subject to a maximum of Rs. 50 Lakh.

4. Bank Credit Facilitation Scheme

Features:
1. The loans under this scheme are facilitated by the National Small
Industries Corporation (NSIC) which has signed a Memorandum of
Understanding (MoU) with banks to offer loans to meet the credit
requirements of SME units.
2. The facilitation is carried out by offering MSME units the option to pick
between private and public sector banks.
3. loans are available in the form of working capital and term loans.
4. Through this scheme, the NSIC will also help SME units to get loans at
affordable rates, help with the documentation process, and other
necessary services related to the loan.

Eligibility:
MSMEs registered in India.

5. Stand-Up India Scheme:

Features:
1. Designed specially to meet the fund requirements of Scheduled Caste
(SC)/Scheduled Tribe (ST)/women entrepreneurs for the purpose of
setting up a greenfield enterprise.
2. The enterprise should be engaged in the business of manufacturing,
trading, or services.
3. The loan will be of composite nature which means that the loan will
be inclusive of working capital and term loan.
4. If the enterprise to be set up is non-individual, the controlling stake
(51%) should be held by either an SC, ST, or women entrepreneur.