If you want to start a new business and are worried about your initial investment money funding, here are 5 government loan schemes to relieve you off your tensions.
Micro, small and medium enterprises (MSME) are crucial for the growth of the economy. MSMEs provide solutions to problems such as poverty, unemployment, income inequality and regional imbalances. It plays an important role in balancing local development and income inequality.
This industry provides employment to millions of people across India. It highlights local talent and contributes to the GDP of the country. It creates around 11.10 crore jobs in the whole country, it is for this reason that MSME is considered the growth engine of India. MSME contributes approximately 8 percent of the total GDP and around 40 percent of total exports.
MSME falls under both organised and unorganised sectors. Even then there are many hurdles that block a smooth business path. Problems like the right kind of financial support for various activities, obtaining infrastructure to support existing business activities or for business, expansion are always persistent.
The following 5 government loan scheme can provide great help.
This scheme is also known as the PSB loan in 59 minutes. It was launched by the Government of India. This scheme introduced a quick business loan portal for individuals who desire to expand their existing business.
Under this scheme businesses can get a loan amount from 1lakh rupees to 5 crores rupees in just a span of 59 minutes. The loan is provided at an interest rate of 8.50% from public and private sector banks and NBFCs.
The MSME loans provide financial resources pretty quickly. The factors which determine the eligibility of businesses are
MUDRA stands for Micro Units Development and Refinance Agency Ltd. It provides refinancing support to banks and NBFCs for lending money to Micro units which require loans. The MUDRA loan scheme is divided into three categories, “Shishu”, “Kishore” and “Tarun”.
The present purpose of MUDRA loan is not to develop small units but it is to offer
This scheme issues a MUDRA card which enables the borrower to use it for multiple withdrawals and facilities ensuring that the borrower can manage the capital efficiently and keep the interest to the minimum.
CGFSMSE is a government business scheme that was launched by the Indian Government. It allows collateral-free credit to the MSME sector. This applies to both existing and new enterprises. To implement CGFMSE the Ministry of MSMEs and small industries development bank of India has established a trust named Credit Guarantee Fund Trust for the Micro and Small Enterprises.
Under this scheme MSMEs can get access to a loan amount of up to 200 lakhs rupees with a preference towards women. Maximum of 85 percent of the sanctioned amount is given a guarantee. 1 percent of the sanctioned amount is charged as a fee per annum.
The NSIC is an ISO certified Indian Government enterprise that falls under MSMEs. It helps and promotes the growth of MSMEs by providing combined support services regarding finance, marketing, technology and other allied services across nations.
To promote MSMEs NSIC provides various schemes
Marketing support is very crucial for the development of MSMEs. To support such enterprises NSIC created schemes such as Consortia and Tender marketing
NSIC provides finance for resources, finance for marketing activities through syndication of banks to MSMEs.
CLCSS was launched by the ministry of MSMEs. Their objective is to help the technological upgrade of MSMEs, especially in rural and suburban areas.
Under this scheme businesses can opt for a 15 percent subsidy on investment in eligible machinery. But there is a limit of 1 crore rupees for the subsidy.
Such loans are created to aid and promote MSMEs and in the process boost the economy.
