1. Credit Guarantee Fund Scheme for micro and small enterprises
The government introduced this scheme to provide collateral-free credit to micro and small enterprises operating in the country. To implement the policy, the Ministry of Micro, Small and Medium Enterprises, Government of India (GoI), and Small Industries Development Bank of India (SIDBI) established a trust by the name of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Under the scheme, fund and non-fund-based credit facilities up to Rs. 200 lakh are covered for eligible borrowers. The guarantee cover under the scheme is up to the extent of 50%, 75%, 80%, and 85% of the sanctioned credit amount.
2. Pradhan Mantri Mudra Yojana (PMMY)
This is a business loan type offered to MSMEs by the Government of India. PMMY disburses the following three types of loans:
- Shishu loans up to Rs. 50,000
- Kishore loans above Rs. 50,000 but up to Rs. 5 lakh
- Tarun loans above Rs. 5 lakh but up to Rs. 10 lakh
The business loan offer for MSMEs via PMMY doesn’t need any collateral, and one can avail of this loan for business growth from financial institutions enrolled and eligible to disburse it. One can also file an online application to procure this loan.
3. Subsidy Offered Through National Small Industries Corporation (NSIC)
An ISO-certified Government of India enterprise, NSIC facilitates the growth of MSMEs by providing services in the field of finance, technology, and marketing. It has initiated two schemes to foster the growth of MSMEs. Read more about these schemes, below:
- Credit Support Scheme: Under this scheme, financial aid is provided to MSMEs to obtain raw materials.
- Marketing Support Scheme: This scheme supports consortia and tender marketing activities of MSMEs.
4. Credit Linked Capital Subsidy Scheme for Technology Upgradation (CLCSS)
SMEs can remain competitive, only by upgrading their technology and machinery periodically. However, this upgrade can be quite capital intensive. This is where the CLCSS scheme is helpful in providing SMEs with the required funds.
The scheme provides an upfront capital subsidy of 15%, limited to a maximum of Rs. 15 lakh to MSMEs to modernise their plants and machinery. Sole proprietorship, partnership firms, cooperative, private, and public limited companies are eligible to benefit from this scheme of the Government of India.
5. Stand-up India Scheme
This is one of the most popular government schemes for small businesses. It aims to finance SC/ST and women entrepreneurs. Its objective is to facilitate loans ranging between Rs. 10 lakh to Rs. 1 crore to at least one borrower (SC or ST or woman) for setting up a greenfield project. The project may be in the manufacturing, trading, or agriculture-allied sector. And, in the case of a non-individual enterprise, an SC/ST or woman entrepreneur must hold at least 51% of the shares.
6. Lean Manufacturing Competitiveness For MSMEs
The objective of this scheme is to enhance the competitiveness of MSMEs by implementing various lean manufacturing techniques. Under this scheme, MSMEs are assisted in bringing down their manufacturing costs via improved processes, better utilising their existing capacities and scientific inventory management.
The government provides financial support up to a maximum of 80% for consultation fees for mini clusters where awareness programs are conducted. MSMEs need to bear the remaining 20% of the costs.
7. Government Subsidy for Small Business for Cold Chain
This scheme aims to provide a cold chain and preservation infrastructure for enterprises involved in horticulture, organic produce, poultry, meat, and dairy products.
Covering pre-cooling facilities at production sites, mobile cooling units, and reefer vans, among others, cooperative societies, NGOs, self-help groups, etc., are eligible to receive grants under this scheme and set up the cold chain and preservation infrastructure.
8. Integrated Development for Leather Sector Scheme
This scheme provides grants to the segments in the leather industry for modernising and technology upgradation. It provides assistance up to 30% for the cost of plant and machinery to SSI units and 20% to non-SSI units.
Existing units in the leather footwear and accessories industries are eligible to receive aid under this scheme that the Ministry of Commerce and Industry offers via Council for Leather Exports.
9. Technology and Quality Upgradation Support (TEQUP) Scheme
This scheme aims to create awareness among MSMEs in the country to use energy-efficient technologies to cut down production costs so that they remain competitive.
For organizing awareness programs, the Government of India provides financial support up to 75% of the actual expenditure, subject to a ceiling of Rs. 75,000 per program. For implementing energy-efficient technologies in their operations, MSMEs receive financial assistance for up to 25% of the project cost. The maximum amount of assistance that MSMEs can procure under this scheme is Rs. 10 lakh.
