Government Loan Schemes For Small Scale Businesses
Author: Neeraj Tehlan
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.
CREDIT LINK CAPITAL SUBSIDY SCHEME FOR TECHNOLOGY UPGRADATION
- 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.
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
- 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.
Schemes provided by SIDBI
- Direct Assistance Scheme
- Indirect Assistance Scheme
- Promotional and Development Activities
- National Equity Fund, scheme
- Technology Development and Modernization Fund scheme
- Single window scheme
- Mahila Udyami Nidhi (MUN)
- Scheme and Equipment Finance Scheme
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.
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
- 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.
MARKET DEVELOPMENT ASSISTANCE SCHEME FOR MSMEs
- 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.
TECHNOLOGY AND QUALITY UPGRADATION SUPPORT TO MSMEs
- 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.
MINI TOOLS ROOM AND TRAINING CENTRE SCHEME
- 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.