Assignment 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. Realising this, the Government of
India has come forward to offer many loan schemes to finance the small-scale business
sector. These loans can be availed by the SMEs to fund their day-to-day operations, expand
their business, purchase new equipment, etc.

Banks that provides this schemes are:

1. ICICI Bank 4. Kotak Mahindra Bank

2. SBI (State Bank o India) 5. Axis Bank
3. HDFC Bank 6. Bank of Maharashtra
 SIDBI Make in India Loan for Enterprises (SMILE)
Features:
The scheme aims to boost innovation, investments, and skill development for MSMEs. It
offers soft and term loans. 25 sectors will get financial aid at competitive rates under 'Make in
India'. New and small MSMEs in services and manufacturing are prioritized.

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 lakh.

 Pradhan Mantri Mudra Yojana (PMMY)

Features:

 The scheme will extend loans to activities that create employment and generate income in
the areas of services, manufacturing, retail, and agriculture.
 No collateral or security need to be provided to avail the Mudra loan.
 Three types of loans can be availed under Mudra for different stages of the business,
namely, Shisha, Kishor, and Tarun.
 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:

1. Small manufacturing units

2. Service sector units
 3. Shopkeepers
4. Fruits / vegetable vendors
5. Truck operators
6. Food-service units
7. Repair shops
8. Machine operators
9. Small industries
10. Artisans
11. Food processors and others

Credit Guarantee Scheme for Micro and Small Enterprises (CGSMSE)

Features:

 The scheme was launched with an intent to offer collateral-free credit to the micro and
small enterprise sector.
 Both working capital facility and term loans are eligible to be covered under the scheme.
 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:

Here are some details of the scheme:

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

 Bank Credit Facilitation Scheme

Features:

 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.
 The facilitation is carried out by offering MSME units the option to pick between private
and public sector banks.
 The loans are available in the form of working capital and termloans.
 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

 Stand-Up India Scheme

Features:

 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.
 The enterprise should be engaged in the business of manufacturing, trading, or
services.
 The loan will be of composite nature which means that the loan will be inclusive of
working capital and term loan.
 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.
Eligibility:

Enterprises in trading, manufacturing, or services sectors are considered eligible for this
scheme. . In case of non-individual enterprises at least 51% of shareholding stake should be
with an SC/ST or woman entrepreneur.

Fiscal incentives:

 It offers composite loans between Rs. 10 lakh to Rs. 1 crore to cover 75% of the
project, inclusive of the term loan and working capital
 The specification of the loan being expected to cover 75% of the project cost. It won’t
be applicable if the borrower’s contribution along with convergence support come
from any other schemes exceeds 25% of the project cost
 The rate of interest would be the lowest applicable rate— base rate (MCLR) + 3% +
tenor premium

 MSME Loan in 59 minutes

Features:

 You can avail a loan of up to Rs1 crore where the amount will be deposited to your
account in less than 60 minutes.
 A rebate of 2% on loan of up to Rs.1 crore provided your establishment is registered with
GST.
 Minimum documents required. You only have to upload the scanned versions of the
required documents and upload it online for you to avail the loan.
 You can avail a loan between Rs.10 lakh and Rs.1 crore under this loan scheme. Since
you have the option of availing this loan from any of the lenders, the rate of interest
levied may differ. The rate of interest however starts at 8%.

Eligibility:

To be eligible for this particular loan, borrower has to be GST, IT compliant and must have at
least 6 months bank history. The mandatory parameters for determining the eligibility of one
company are:

1. Income/ Revenue
 2. Repayment Capacity
3. Existing credit facilities
4. Any other factors, as set by lenders (banks or NBFCs)

Fiscal Incentives:

Under this scheme, business loans for start-ups are provided with loan amount from
minimum of Rs. 1 lakh and maximum up to Rs. 1 crore. The rate of interest offered under this
scheme is 8% onwards.

Eligibility Criteria

The eligibility criteria for government loans for small scale businesses will vary from lender
to lender but the basic ones have been listed below:
Documents Required:

Marks Obtained Sign.of Teacher

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