To support and promote the growth of MSMEs, the government of India introduced MSME schemes. The scheme promises financial support to MSMEs and has streamlined the whole credit system for these enterprises. Under this, multiple empowering schemes can boost the growth and expansion of MSMEs in India. Let’s talk about top MSME schemes in detail.
Did You Know? India has a 7.9 million base of micro, small and medium enterprises.
What is the MSME Scheme?
The MSME scheme was introduced by the Ministry of Micro, small and medium enterprises with an aim to support the growth of MSMEs by enhancing their productivity and providing financial assistance for better growth opportunities. Through the scheme, the government of India wishes to achieve self-reliant economy which can be made possible by promoting the growth of MSMEs in the country.
Did You Know? The MSMEs in India have employed 40% of the country’s workspace.
Top MSME Schemes: Empowering Small Businesses
As a small business owner, there are multiple advantages of opting for an MSME scheme. Let’s first look at the top MSME schemes that every small business owner should know about:
- Pradhan Mantri Mudra Yojana
The PMMY is a well-known refinancing scheme for small, micro and medium enterprises. Under the scheme, loan amounts up to ₹10 lakhs are provided to established businesses. The loan is known as the MUDRA loan and is offered to MSMEs in three different categories:
- Shishu: Under the Shishu scheme, a loan amount of up to ₹50,000 is provided.
- Kishor: Under the Kishor scheme, loan amount from ₹50,001 to ₹5,00,000 is provided.
- Tarun: Under the Tarun scheme, loan amount from ₹5,00,001 to ₹10,00,000 is provided.
How to Apply for Pradhan Mantri Mudra Yojana?
The PMMY scheme is provided at various authorised banks, and applicants can apply online or offline. The applicant must fill out an application form along with the necessary documents. Once approved, the loan amount is instantly disbursed.
- Credit Linked Capital Subsidy
The Credit Linked Capital Subsidy, a MSME loan scheme, was introduced primarily with the purpose of helping small businesses develop their technological setup. One of the biggest challenges faced by MSMEs in rural or semi-urban areas is the dependency on obsolete technology. To help them expand and bring advanced technology, the scheme provides subsidies up to ₹ 1 crore.
How to Apply for a Credit Guarantee Fund Scheme for Small and Micro Enterprises? Claiming subsidy under this scheme, the applicant has to apply before a primary lending institution (PLI). The institute then forwards the application to the nodal agency from where the application is sent to the development commissioner of MSME for final approval. Once approved, the subsidy is released to the nodal agency and the applicant.
- Micro Finance Program
The Micro Finance Program was specifically introduced for under-served states and expanded the reach of microcredit programs. Through this scheme, the aim is to reduce the financial burden from the shoulders of microfinance institutions and non-governmental organisations.
Microfinance institutes and non-governmental organisations source their funds for MSMEs from SIDBI. To source funds, they have to provide collateral that makes up an additional financial burden. After the introduction of the microfinance program, the collateral requirements are covered under the scheme.
How to Apply for a Micro-Finance Program? The scheme can be applied only by microfinance institutes and non-governmental organisations by applying SIDBI.
- Prime Minister’s Employment Generation Program
As the name suggests, this scheme was introduced to generate employment by funding the growth of MSMEs. Under this scheme, subsidies are provided up to an amount of ₹25 lakhs for the manufacturing sector and up to ₹10 lakhs for the service sector.
How to Apply for the Prime Minister’s Employment Generation Program?
Subsidies under the scheme can be availed by any entrepreneur above the age of 18 years by submitting an online application on the official PMEGP portal. The applicant has to then submit a printed copy of the application to an authorised bank with a business proposal.
- A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
The scheme was introduced to support the establishment of livelihood business incubation (LBI) centres in India. These LBI centres work for promoting stands ups in the agricultural sector and ASPIRE aims are facilitating job creation, promoting entrepreneurship culture and supporting economic development at a grassroots level. ASPIRE is a truly amazing initiative that has reformed the way the agricultural sector in India operates.
How to Apply for A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)?
To apply for ASPIRE, the applicant has to apply to the ASPIRE scheme steering committee. The committee works for the management and coordination of the scheme.
- Performance and Credit Rating Scheme
A scheme that every small business owner should explore is the Performance and Credit Rating Scheme. The scheme was launched with Industry Associations, the Indian Banks’ Association (IBA) and Rating Agencies to help MSMEs learn more about their business model, its prospects and overall strengths and weaknesses. Through this scheme, small business owners can enhance their chances of securing financial support from different lending institutes by working on their existing business operations.
How to Apply for a Performance and Credit Rating Scheme?
To avail of benefits under the scheme, applicants can apply to rating agencies from the official list. Each rating agency has a different application and fee procedure that can be checked from their official website. Applicants can also visit any branch of NSIC to apply.
Summing Up
MSME schemes for small business owners are extremely reliable given their easy accessibility, quick approval and instant disbursement. By availing of these schemes, small business owners can expand and implement their developmental strategies. Remember that to avail benefits of any of the schemes, your business must be duly registered and meet the eligibility criteria.
Applying online for MSME loans through online portals like Lendingkart can make the process simpler and hassle-free.
References
Micro, small and medium enterprises are the backbone of India’s economy. They contribute approximately 30% to the country’s GDP and have made significant contributions to making India self-sufficient in many ways.
To support and promote the growth of MSMEs, the government of India introduced MSME schemes. The scheme promises financial support to MSMEs and has streamlined the whole credit system for these enterprises. Under this, multiple empowering schemes can boost the growth and expansion of MSMEs in India. Let’s talk about top MSME schemes in detail.
Did You Know? India has a 7.9 million base of micro, small and medium enterprises.
What is the MSME Scheme?
The MSME scheme was introduced by the Ministry of Micro, small and medium enterprises with an aim to support the growth of MSMEs by enhancing their productivity and providing financial assistance for better growth opportunities. Through the scheme, the government of India wishes to achieve self-reliant economy which can be made possible by promoting the growth of MSMEs in the country.
Did You Know? The MSMEs in India have employed 40% of the country’s workspace.
Top MSME Schemes: Empowering Small Businesses
As a small business owner, there are multiple advantages of opting for an MSME scheme. Let’s first look at the top MSME schemes that every small business owner should know about:
- Pradhan Mantri Mudra Yojana
The PMMY is a well-known refinancing scheme for small, micro and medium enterprises. Under the scheme, loan amounts up to ₹10 lakhs are provided to established businesses. The loan is known as the MUDRA loan and is offered to MSMEs in three different categories:
- Shishu: Under the Shishu scheme, a loan amount of up to ₹50,000 is provided.
- Kishor: Under the Kishor scheme, loan amount from ₹50,001 to ₹5,00,000 is provided.
- Tarun: Under the Tarun scheme, loan amount from ₹5,00,001 to ₹10,00,000 is provided.
How to Apply for Pradhan Mantri Mudra Yojana?
The PMMY scheme is provided at various authorised banks, and applicants can apply online or offline. The applicant must fill out an application form along with the necessary documents. Once approved, the loan amount is instantly disbursed.
- Credit Linked Capital Subsidy
The Credit Linked Capital Subsidy, a MSME loan scheme, was introduced primarily with the purpose of helping small businesses develop their technological setup. One of the biggest challenges faced by MSMEs in rural or semi-urban areas is the dependency on obsolete technology. To help them expand and bring advanced technology, the scheme provides subsidies up to ₹ 1 crore.
How to Apply for a Credit Guarantee Fund Scheme for Small and Micro Enterprises? Claiming subsidy under this scheme, the applicant has to apply before a primary lending institution (PLI). The institute then forwards the application to the nodal agency from where the application is sent to the development commissioner of MSME for final approval. Once approved, the subsidy is released to the nodal agency and the applicant.
- Micro Finance Program
The Micro Finance Program was specifically introduced for under-served states and expanded the reach of microcredit programs. Through this scheme, the aim is to reduce the financial burden from the shoulders of microfinance institutions and non-governmental organisations.
Microfinance institutes and non-governmental organisations source their funds for MSMEs from SIDBI. To source funds, they have to provide collateral that makes up an additional financial burden. After the introduction of the microfinance program, the collateral requirements are covered under the scheme.
How to Apply for a Micro-Finance Program? The scheme can be applied only by microfinance institutes and non-governmental organisations by applying SIDBI.
- Prime Minister’s Employment Generation Program
As the name suggests, this scheme was introduced to generate employment by funding the growth of MSMEs. Under this scheme, subsidies are provided up to an amount of ₹25 lakhs for the manufacturing sector and up to ₹10 lakhs for the service sector.
How to Apply for the Prime Minister’s Employment Generation Program?
Subsidies under the scheme can be availed by any entrepreneur above the age of 18 years by submitting an online application on the official PMEGP portal. The applicant has to then submit a printed copy of the application to an authorised bank with a business proposal.
- A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)
The scheme was introduced to support the establishment of livelihood business incubation (LBI) centres in India. These LBI centres work for promoting stands ups in the agricultural sector and ASPIRE aims are facilitating job creation, promoting entrepreneurship culture and supporting economic development at a grassroots level. ASPIRE is a truly amazing initiative that has reformed the way the agricultural sector in India operates.
How to Apply for A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)?
To apply for ASPIRE, the applicant has to apply to the ASPIRE scheme steering committee. The committee works for the management and coordination of the scheme.
- Performance and Credit Rating Scheme
A scheme that every small business owner should explore is the Performance and Credit Rating Scheme. The scheme was launched with Industry Associations, the Indian Banks’ Association (IBA) and Rating Agencies to help MSMEs learn more about their business model, its prospects and overall strengths and weaknesses. Through this scheme, small business owners can enhance their chances of securing financial support from different lending institutes by working on their existing business operations.
How to Apply for a Performance and Credit Rating Scheme?
To avail of benefits under the scheme, applicants can apply to rating agencies from the official list. Each rating agency has a different application and fee procedure that can be checked from their official website. Applicants can also visit any branch of NSIC to apply.
Summing Up
MSME schemes for small business owners are extremely reliable given their easy accessibility, quick approval and instant disbursement. By availing of these schemes, small business owners can expand and implement their developmental strategies. Remember that to avail benefits of any of the schemes, your business must be duly registered and meet the eligibility criteria.
Applying online for MSME loans through online portals like Lendingkart can make the process simpler and hassle-free.
References
