A significant source of employment for India’s expanding population is the Micro, Small, and Medium Enterprise (MSME) sector, which accounts for over 40% of the country’s GDP. In acknowledgment of the importance of MSME growth in the post-demonetization climate, the government has launched new business funding schemes and improved existing ones. Listed below are the examples of such government loans for small businesses in India:
MUDRA Loans
The Micro-Units Development and Refinance Agency organization, the government, provides financing to micro-business units. “Fund the unfunded” is the guiding principle of MUDRA loans.
All the banks offer MUDRA Loans. These loans were significant in developing the idea of low-cost finance for micro and small firms.
The MUDRA loan category is listed below –
LOAN CATEGORY AMOUNT
1. Shishu Loans- Up to Rs. 50,000
2. Kishor Loans- 50,000 to 5,00,000
3. Tarun Loans- 5,00,000 to 10,00,000
Loans by National Small Industry corporation
To provide financial, marketing, technological, and other pertinent support for the development, growth, and expansion of MSMEs, the MSME Ministry established the Government of India Corporation. The purpose of this corporation is to encourage the growth of the MSME sector in India, primarily through the two kinds of government business credit programs: (a) the Credit Support Scheme and (b) the Marketing Support Scheme (for procuring raw materials).
It offers lending facilities to MSMEs directly or through agreements with other banks.
Udyogini
A program called Udyogini, which means “women empowerment,” has been started to empower and assist Indian women in commencing their businesses. The Women Development Corporation implemented the program on behalf of the government.
Up to Rs. 15,00,000 is the maximum loan amount offered under this program. The criteria for availing of the loan are listed below:
· The age range for a woman entrepreneur should be 18 to 55.
· The family’s annual income cannot exceed Rs. 15,00,000.
· For physically impaired or widowed women, there is no upper-income restriction.
Requirements to avail of the loan:
· There are no processing fees or collateral requirements.
· Passport-sized photos
· A birth certificates
· A below-poverty line card
· An Aadhar card
· Proof of their caste
· A passbook or bank account
· A ration cards
· Documentation of their income
The Stand-Up India Plan
The Stand-Up India project seeks to support women and members of Scheduled Caste or Scheduled Tribe in starting their businesses by assisting banks in providing loans ranging from Rs. Ten lakhs to Rs. One crore.
The specific borrowing company can be active in the trading, service, or manufacturing sectors. For non-individual businesses, a woman, a person of color, or someone with a woman’s ancestry must own at least 51% of the shares and control.
Credit Guarantee Fund Program for Small and Micro Businesses (CGFMSE)
The government of India introduced a lending program called Credit Guarantee Fund Trust for Micro and Small Enterprises (CGFMSE), which enables MSME enterprises to get subsidies through loans without collateral. Both new and existing businesses may apply for these loans.
Funding under this program is available for working capital loans up to Rs. Two hundred lakhs, as well as qualified women entrepreneurs. Enterprises engaged in manufacturing, including educational institutions, retail businesses, training facilities, self-help organizations, and service industries, are eligible to receive money under this program.
