Practical No.

5
Submitted by
Name: - Manav Chudasama
Class: - IF5I-C
Roll no.: - 21202C0025

Aim: 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. These loans can be availed by the SMEs to fund their day-to-day operations, expand
their business, purchase new equipment, etc.

Government Loan Schemes for Small Scale Businesses:

Rate of Interest
Name of the Scheme Loan Amount Repayment Tenure
(p.a.)
MSME Loans in 59 Rs. 10 lakhs to
8% onwards 7 years
minutes Rs. 1 Crore
Up to Rs 200
Credit Guarantee Scheme - -
lakh
SIDBI Make in India Up to 10 years
Rs 25 lakh to Rs
Loan for Enterprises 9.45% to 12.70% including 3 years
50 lakh
(SMILE) moratorium
Up to base rate +3% Rs 10 lakh to Rs
Stand-Up India Scheme 7 years
tenor premium 1 crore
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:
a. Income/ Revenue
b. Repayment Capacity
c. Existing credit facilities
d. 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 ofRs. 1 lakh and maximum up to Rs. 1 crore. The rate of interest offered under this
scheme is 8% onwards.

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 bywomen,
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

SIDBI Make in India Loan for Enterprises (SMILE)

Features:
• The scheme has been designed to foster innovation, facilitate investment, protect
intellectual property, enhance skill development, and build the best infrastructure for
MSMEs.
• Under the scheme, loans will be offered in the forms of soft loan and term loan.
• 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.
• 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 expandingtheir 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.
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 lakhs 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