India has recently been called the only, truly emerging market in the world. One part of this is increased by the micro, small and medium enterprises of the country. SME sector contributes more than 40% of the total GDP and remains an important source of employment for India’s growing population. Accepting the importance of SME development in the era of monetization, the Government has introduced some new business loan schemes and promoted all the existing people. Here are the top five business loan schemes of the Government of India, which you can avail for small business finance.
Micro-units Development and Refinance Agency (MUDRA) is an organization to provide business finance to micro-business units by the Indian government. Loans and unfunded funding under this scheme are given for excuses. Since smaller companies and startups are often left for their own equipment for financing their enterprise, the government has made such undertakings a concept of low-cost credit.SME business loans are generally given to micro or small businesses active in the manufacturing, trading and service sectors. MUDRA is structured under:
Sishu Loan up to ₹ 50,000 / –
Kishore Loan up to Rs.2, 00,000 / –
Tarun Loan, up to Rs. 10, 00,000 / –
MSME Business Loan in 59 Minutes
Perhaps the most vocational loan plan is being talked about, ‘MSME Loan’ in 59 minutes, which was first announced in September 2018. Under this scheme, SME loans in India have been given for financial assistance and promotion of MSME development in the country both new and existing businesses. Can plan for financial assistance of up to 1 crore. The actual process takes 8-12 days to complete, while approval or rejection within the first 59 minutes of application is given. This is a refinance scheme, in which five authorized public sector banks will provide funds. The interest rate depends on the nature and credit rating of your business.
Credit Guarantee Fund Scheme for Micro and Small Enterprises
CGMSE was launched for the first time in 2000 as a monetary assistance scheme for micro and small enterprises. It provides collateral-free loans for both new and existing business units, which meet its eligibility criteria. This scheme provides working capital loans of up to 10 lakh without any collateral.
Under this scheme, business loans are financed by various public and private sector banks.
National Small Industries Corporation Subsidy
NSIC subsidy provides two types of financial benefits for small businesses – raw material assistance and marketing support. Under NSIC’s raw material assistance scheme, both indigenous and imported raw materials are included. Under marketing assistance, loan for SME in India are given funds to increase the market value of their competitiveness and their products and services. NSIC focuses primarily on the financing of small and medium enterprises who want to improve their manufacturing quality and quantity.
Credit Link Capital Subsidy Scheme
This scheme allows small businesses to upgrade their process by financing technical upgradation. It can be related to many processes within the organization, such as manufacturing, marketing, supply chain, etc. Through the CLCSS scheme, the purpose of the government is to reduce the cost of production of goods and services for small and medium enterprises, thus allowing them to stay competitive in the local and international markets. This scheme is run by the Ministry of Small Industries. CLCSS offers an up-front capital subsidy of 15% for eligible business.
Quick SME Business Loans
While these schemes show the commitment of the past and present Indian governments to develop the nation’s economy, a lot needs to be done to make the plans effective. For example, use by government. The subsidy model takes away the ‘accelerated’ factor from the business loans given by the model schemes.
On the other hand, MSME Finance is approved and distributed within 72 hours by non-banking financial companies like Indifi. This is done by combining business analytics and online technologies for loan approval and disbursement rather than relying on paperwork and centuries-old processing techniques.