Under the scheme, MSMEs borrowers with up to Rs 25 crores of total borrowing can avail further 20% of the loan outstanding from NBFCs, banks, and other financial institutions (FI).
This incremental lending by financial institutions and banks of upto Rs 3 lakh crore in total will be 100% guaranteed by the Government of India(GOI). Borrowers will have a one-year moratorium period for the repayment, and the interest rate charged is capped at 9.25 percent at the lower end and 14 percent at the upper end in the case of NBFCs.
The scheme also aims to help stressed borrowers who are not in default during COVID.
The scheme is launched to make available collateral-free credit to both the existing and the new MSMEs. The trust ‘Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)’ takes care of the implementation of the scheme, which was established by the Ministry of MSMEs, GoI, and SIDBI.
Term loans/working capital facility up to Rs.100 lakh per borrowing unit is eligible to be covered under the scheme, which can be extended without any collateral security or 3rd party guarantee, to a new or existing MSE. However, the guarantee cover is limited to the agreed tenure of the term loan/composite credit, which is five years in case of working capital.
The scheme facilitates technology up-gradation by giving a 15 percent upfront capital subsidy up to a maximum cap of ₹ 15.00 lakhs (i.e., maximum investment in approved machinery is ₹ 1.00 crore) to MSE units such as khadi, village, and coir industrial units.
The amount is provided on institutional finance available for induction of state-of-the-art or near state-of-the-art technology for up-grading the present technology level to a substantially higher one involving improved productivity or improvement in the quality of the product or developed environmental condition including work environment.
It would also include the installation of improved packaging techniques, anti-pollution measures, energy conservation machinery, in-house testing, and on-line quality control.
Performance & Credit Rating scheme establishes an independent and trusted third party opinion on the abilities and credit-worthiness of MSEs. They and makes credit available at attractive interest rates and will ensure better productivity.
Under this scheme, a percent of Rating Agency charges are reimbursed by the Ministry of Small Scale Industries (SSI). The scheme is also meant to increase their acceptability from the Banks/Financial Institutions, Customers / Buyers, and Vendors.
Bill discounting scheme covers purchases or discounts of bills arising out of genuine trade transactions like purchase of supplies produced by small scale units to reputed public limited companies or Central Government Departments/Undertakings.
Application for the request to sanction limit under Bill Discounting Scheme is to be submitted by the seller unit duly signed by an authorized signatory, i.e., Proprietor/Partner/Director of the Firm/Company in duplicate in the prescribed form.
The Bill of exchange drawn by MSMEs for the supplies and duly accepted by Purchaser will be discounted against the security of Bank Guarantee to be provided either by the Buyer or Seller, in favour of NSIC.
National Small Industries Corporation mediates and provides help to small scale industries (SSI) intending to give machinery on hire or purchase basis and to assist and market in the exports.
SSIs registered with NSIC are exempted from paying Earnest money and provided free participation in government tendered purchases. It assists small scale industries right from financing, training, providing raw materials for manufacturing and marketing of finished products of small scale enterprises.
Several branches of NSIC are opened up by the government over the years in several big and small towns, where small enterprises were growing for training persons, the training facilities canters, and assisting in modernizing the small enterprises.
Nowadays, it also assists small industries by setting up incubation centers in other continents and even international technology fairs to offer aspiring entrepreneurs.
Raw Material Assistance Scheme aims at helping MSMEs by financing the purchase of Raw Material (both indigenous & imported). It allows MSMEs to focus better on manufacturing quality products.
The scheme provides the benefit of financial assistance for procurement of raw materials up to 3 months, materials facilitated under bulk supplies arrangements are provided at bulk supplier’s rate by eliminating the middlemen, discounts received under bulk supplies arrangements are shared with MSMEs, and availability of raw material on credit.
The scheme creates sustainable entrepreneurship development in the area of Information and Communication Technology (ICT), especially first-generation entrepreneurs, by fostering innovative ideas to commercialize.
Entrepreneurs harness the expertise of NSIC in extending the hand holding of start-up companies to become successful small enterprises. The scheme also caters to networking between R&D and Industry beneficiaries to create successful commercial ventures.
Some of the infrastructure supports are built-up space, standard computer hardware, access to a software library, internet, and business Centre facilities, technology business incubator on Information Technology in a conducive environment.
Preliminary Level Training / Counselling and Facilitation in fine-tuning business plans, Specialized training, Mentoring Services, Market exposure are also provided along with facilitating seed finance/venture capital.
For the utilization of the Space and infrastructure of NSIC-TBI, the prospective entrepreneur shall pay a monthly fee for NSIC. In addition to the license fee, business center, telephone and internet charges are also payable on actuals. Expert services like marketing, legal, accountancy are also chargeable.
PMMY is a scheme that provides loans up to 10 lakh to the non-corporate, non-farm small/micro-enterprises. The loan is classified as MUDRA loan under PMMY, which is given by commercial banks, RRBs, MFIs, NBFCs, small finance banks.
The borrower gets the loan by approaching any of the lending institutions mentioned above or can apply online through the portal. PMMY, MUDRA has three products, namely ‘Shishu,’ ‘Kishore,’ and ‘Tarun,’ which signifies the stage of development and funding needs of the beneficiary micro-entrepreneur and it also serves as a reference point for the upcoming phase of growth.
10. Pradhan Mantri Kaushal Vikas Yojana(PMKVY)
PMKVY, the flagship scheme of the Ministry of Skill Development & Entrepreneurship (MSDE), is implemented by the National Skill Development Council.
The goal of this skill certification scheme is to help Indian youths take up industry-relevant skills with training, which will help them secure a better livelihood opportunity. Individuals with prior experience or skills are also assessed and certified under Recognition of Prior Learning (RPL).