Government Loan for Business Startup in India
MUDRA Loan Scheme : Pradhan Mantri Mudra Yojana (PMMY) Launched in 2015, this scheme is headed by the Micro Units Development and Refinance Agency (MUDRA) and it aims at offering loans to all kinds of manufacturing, trading, and service sector activities. The scheme offers loan under three categories – Shishu, Kishor, and Tarun in amounts ranging between Rs.50,000 and Rs. 10 lakh. The Mudra loan can be availed by artisans, shopkeeper, vegetable vendors, machine operator, repair shops, etc.
Bank Credit Facilitation Scheme : Started by National Small Industries Corporation, this scheme aims to fund the medium and small-scale enterprises in the country. The NSIC has partnered with various banks to provide loans to the MSME units. The repayment tenure of the scheme ranges between 5 years and 7 years but in special cases, it can be extended up to 11 years.
Credit Guarantee Scheme (CGS) : This loan can be availed by both new and existing MSMEs that are involved in service or manufacturing activities but excludes educational institutions, agriculture, retail trade, Self Help Groups (SHGs) etc. Up to Rs. 200 lakh can be borrowed under this scheme headed by the Credit Guarantee Fund Trust for Micro and Small Enterprise.
SIDBI Make in India Soft Loan Fund for MSMEs : Headed by SIDBI, the fund provides loads to enterprises for expansion, technology upgrade, modernization and other projects for growing the business. It offers term loans to MSMEs. For the general category, the loan amount is 10% of the total project cost subject to a maximum of Rs.10 lac and for a scheduled tribe and scheduled caste, the loan amount is 15% of the cost subject to a maximum of Rs. 30 lacs. The applicant should have a stake of 51% in the enterprise.
Credit Linked Capital Subsidy for Technology Upgrade : The small-scale industry startups which have registered with the Directorate of Industries and have upgraded their machinery and plant with new technology are eligible for this scheme. The loan amount ranges up to Rs.1 crore at the rate of 15%.
Market Development Assistance Scheme for MSMEs : This is a scheme that helps the micro, small, and medium enterprises gain exposure by participating in International exhibitions and trade fairs. It helps them display the potential and strengthens the units. National Bank for Agriculture and Rural Development : NABARD is a development bank that offers credit to promote agriculture, small industries and cottage industries, village industries, and handicrafts. It acts as a facilitator for rural prosperity that improves institutional development by monitoring and inspecting client banks.