MSME loan

Top 10 government loan schemes for  MSMEs in India

MSMEs (Micro, Small, and Medium Enterprises) play a vital role in the growth of the Indian economy. The Indian government understands the importance of supporting small businesses. As a result, it has established several government business loan schemes to help these enterprises get the funding they need to grow and succeed. Here we will take a closer look at the top 10 government business loan schemes available in India and provide you with the information you need to decide which one is right for your business.

Top 10 government business loan schemes for MSMEs in India

Here are the top 10 government loan schemes available in India for MSMEs

1. Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri Mudra Yojana is a government scheme that provides loans of up to ₹10 lakhs to small businesses and MSMEs in India. The loan can be used for various purposes, including working capital, buying machinery, and more. The scheme is available through various participating banks, and the loan is provided without any collateral.

Pradhan Mantri Mudra Yojana (PMMY)

  • Eligibility: MSMEs in India
  • Loan amount: Up to ₹10 lakhs
  • Purpose: Working capital, buying machinery, etc.
  • No collateral required

2. Stand Up India

Stand Up India is a government scheme that provides loans of up to ₹10 lakhs to women entrepreneurs, Scheduled Castes (SCs), Scheduled Tribes (STs), and persons with disabilities (PwDs). The loan can be used for various purposes, including starting a new business, expanding an existing business, or modernizing an existing one. The loan is provided without any collateral and is available through participating banks.

Stand Up India

  • Eligibility: Women entrepreneurs, Scheduled Castes (SCs), Scheduled Tribes (STs), persons with disabilities (PwDs)
  • Loan amount: Up to ₹10 lakhs
  • Purpose: Starting a new business, expanding an existing business, modernizing an existing business
  • No collateral required

3. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE)

The Credit Guarantee Fund Scheme for Micro and Small Enterprises is a government scheme that provides credit guarantees to banks to encourage them to provide loans to small businesses and MSMEs. The scheme provides credit guarantees of up to ₹2 crores, and the loan is provided without any collateral.

Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE)

  • Eligibility: Small businesses and MSMEs in India
  • Loan amount: Up to ₹2 crores
  • Purpose: Encourages banks to provide loans to small businesses and MSMEs
  • No collateral required

4. National Small Industries Corporation (NSIC)

The National Small Industries Corporation is a government-owned corporation that provides various services to small businesses and MSMEs in India, including loan financing. The loans provided by NSIC can be used for a variety of purposes, including working capital, buying machinery, and more. The loan is provided without any collateral, and the interest rate is subsidized.

National Small Industries Corporation (NSIC)

  • Eligibility: MSMEs in India
  • Loan amount: Varied
  • Purpose: Working capital, buying machinery, etc.
  • No collateral required, subsidized interest rate

5. Technology Upgradation Fund Scheme (TUFS)

The Technology Upgradation Fund Scheme is a government scheme that provides subsidies to MSMEs in India for upgrading their technology. The scheme is aimed at helping these enterprises become more competitive and efficient. To be eligible for the scheme, a MSME must be registered with the government and meet certain financial criteria.

Technology Upgradation Fund Scheme (TUFS)

  • Eligibility: MSMEs in India, registered with the government and meeting certain financial criteria
  • Loan amount: Subsidies for upgrading technology
  • Purpose: Helping enterprises become more competitive and efficient

6. Micro and Small Enterprises – Cluster Development Programme (MSE-CDP)

The Micro and Small Enterprises – Cluster Development Programme is a government scheme that assists MSMEs in India to develop their businesses. The assistance can include funding for infrastructure development, training, marketing, and more. The scheme is aimed at promoting the growth and competitiveness of these enterprises.

Micro and Small Enterprises – Cluster Development Programme (MSE-CDP)

  • Eligibility: MSMEs in India
  • Loan amount: Assistance for infrastructure development, training, marketing, etc.
  • Purpose: Promoting growth and competitiveness of enterprises

7. National Scheduled Castes and Scheduled Tribes Finance and Development Corporation (NSFDC)

The National Scheduled Castes and Scheduled Tribes Finance and Development Corporation is a government-owned corporation that provides financial assistance and support to Scheduled Castes (SCs) and Scheduled Tribes (STs) in India. The corporation provides loans for a variety of purposes, including starting a new business, expanding an existing business, or modernizing an existing business. The loan is provided without any collateral, and the interest rate is subsidized.

National Scheduled Castes and Scheduled Tribes Finance and Development Corporation (NSFDC)

  • Eligibility: Scheduled Castes (SCs) and Scheduled Tribes (STs) in India
  • Loan amount: Varied
  • Purpose: Starting a new business, expanding an existing business, modernizing an existing business
  • No collateral is required, subsidized interest rate

8. Prime Minister’s Employment Loan Scheme

The Prime Minister’s Employment Loan Scheme is a government scheme that provides loans to MSMEs in India to create employment. The loan can be used for various purposes, including starting a new business, expanding an existing business, or modernizing an existing one. The loan is provided without any collateral, and the interest rate is subsidized.

Prime Minister’s Employment Loan Scheme

  • Eligibility: MSMEs in India
  • Loan amount: Varied
  • Purpose: Creating employment
  • No collateral is required, subsidized interest rate

9. Annapurna Scheme

The Annapurna Scheme is a government scheme for women entrepreneurs in food catering businesses in India. It provides loans of up to ₹50,000 in India to buy kitchen equipment. The loan is provided without any collateral and is available through participating banks.

Annapurna Scheme

  • Eligibility: Women entrepreneurs in food catering business in India
  • Loan amount: Up to ₹50,000
  • Purpose: Buying kitchen equipment
  • No collateral required

10. National Minorities Development and Finance Corporation (NMDFC)

The National Minorities Development and Finance Corporation is a government-owned corporation that provides financial assistance and support to minority communities in India. The corporation provides loans for a variety of purposes, including starting a new business, expanding an existing business, or modernizing an existing business. The loan is provided without any collateral, and the interest rate is subsidized.

National Minorities Development and Finance Corporation (NMDFC)

  • Eligibility: Minority communities in India
  • Loan amount: Varied
  • Purpose: Starting a new business, expanding an existing business, modernizing an existing business
  • No collateral required, subsidized interest rate

The government of India offers diverse loan schemes to support small businesses and MSMEs. These loan schemes provide financing for multiple purposes, including starting a new business, expanding an existing business, or modernizing an existing business. Each scheme has its own business loan eligibility criteria, interest rates, and repayment terms, so it is crucial to research and compare the various available options before applying for a loan.

To know more about all the available schemes and updated information regarding eligibility and other details, please visit the respective government websites or check with a participating bank for further details.

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