Government Loan Schemes For Small Scale Businesses

by Neeraj Tehlan
Posted: Jun 17, 2017

THE CREDIT GUARANTEE FUND SCHEME FOR MICRO AND SMALL ENTERPRISES

It is launched by the Government of India to provide collateral free finance to the micro and small enterprise sector.
The Amount is contributed by Government and SIDBI is 4:1 in ratio.
It also provides credit facilities in the form of term loans and working capital facility of up to Rs.100lakh per borrowing unit.
Rehabilitation assistance is also made available to sick units.

Its main intention is to create an impact in the international trade.
It is launched to facilitate technology up gradations by extending an upfront capital subsidy of 15% (max INR 15lakhs).
The corresponding plant and machinery is important
It is available to machinery to Sole Proprietorship, Partnership firms, Cooperative, Private and Public Limited Companies.

SIDBI is one of the most illustrious names among the government financial institutions.
It played an active role in the promotion and development of the small business industry.

NATIONAL SMALL INDUSTRIES CORPORATION LIMITED (NSIC)

The main feature is to import machines on hire-purchase terms.
It promotes awareness about advancements in the small scale industries sector of the country.
It highlight on supply and distribution of both indigenous and imported raw materials as well as exporting the products of the small business units.

NABARD mainly came into existence to promote agriculture based rural business enterprises.
It mostly offers financial assistance to small scale industries viz,. Cottage and village industry.

It offers funding for participation in international trade fairs and exhibitions under MSME India stall.
It also offers financing for sector specific market studies by industry association, export promotion councils and FIEO.
This scheme offers reimbursement of 75% of a one-time registration fee and 75% of annual fees paid to GSI by SMEs for the first 3 years for the bar code.

It aims to improve the production quality of MSMEs to encourage them to adopt global manufacturing standards.
The main aim of this scheme is to sensitize the manufacturing MSME sector to make use of energy sufficient technologies
And also the manufacturing processes to reduce manufacturing cost and emissions of harmful gasses that can hamper the environment
The Indian government provides financial support to the extent of 75% of the actual expenditure to assist manufacturing sector purchase energy efficient technologies for production.

The mission of this scheme is to develop more tool room facilities to provide technological support to the MSMEs
The training in tool manufacturing and tool design to create a skilled workforce of workers, supervisors, engineers/designers.
90% of the cost of machinery/equipment in case a new Mini tool room is to be created.
In case an existing room to be upgraded – 75% of the cost is funded.

MUDRA LOAN (Micro Units Development and Refinance Agency Ltd.)

The vision of Funding the Unfunded.
It is established by Government of India for development and refinancing activities relating to micro units.
It provides low cost funding for MFI (Micro Finance Institutes)
It also supporting to the institutions, societies, trusts section 8 companies, co-operative societies, small Banks, Scheduled commercial Banks and Rural Banks which are in the business of lending to micro or small business etc.

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