Top 5 Government Schemes for the Growth of your SMEs
Fostering economic development and job creation, Micro, small and medium enterprises, better known as MSMEs, play a vital role in India’s growing economy. Said to be the engines of the economic setup, MSMEs contribute almost 30% to the country’s GDP. They also play a crucial role in generating employment, as over 110 million people are associated with the MSME sector1. Being such a major contributor to the GDP as well as the employment landscape, the Indian government
To boost the MSMEs and the economy, the government introduces various schemes and initiatives to support the development of the MSMEs. To further strengthen this pillar of the economy, the following schemes have been announced over the years:
- Pradhan Mantri Mudra Yojana (PMMY) – Launched in the year 2015, the Pradhan Mantri Mudra Yojana (PMMY) is a government initiative. Also called Mudra Loans, Micro Units Development and Refinance Agency Limited, the main aim of the scheme is to offer financial support to micro and small enterprises. The scheme offers 3 programmes:
- Option 1: Shishu
An excellent option for small capital requirements, Shishu offers financial aid up to Rs. 50,000. - Option 2: Kishore
This loan option is available to businesses that already have established operations and need funds to further grow their business. Kishore provides a loan of up to Rs. 5 lakhs. - Option 3: Tarun
With the Tarun Mudra loan, you can borrow up to Rs. 5 Lakhs to 10 Lakhs. The scheme offers a longer repayment tenure of 3 to 5 years.
Did you know, as per government data, up to 30 June 2023, about 42.20 crore loans have been sanctioned to the borrowers, which comes to around INR 24.34 lakh crore?
- Stand-Up India – The Stand-Up India scheme is aimed at strengthening minorities in the country, including Scheduled Tribes, Scheduled Castes and also women entrepreneurs. Focused mainly on first-time ventures, the loans can offer loans from INR 10 lakhs to INR 1 crores, covering almost 75% of the cost of the project/ business plan. You have the option to repay the loan in a period that can be as high as 7 years.
Note: Keep in mind that the loan facility is available only for greenfield projects. A greenfield project is one which is a first-time venture. It is where there is construction on unused land. There is no need to renovate or demolish an existing building/ structure.
- National Small Industries Corporation Subsidy – A certified enterprise of the Government of India, the National Small Industries Corporation Subsidy, better known as the NSIC scheme, promotes MSMEs all across the country. Under the scheme, there are various options customised for the following benefits:
- Purchasing raw material assistance. Eligible applicants can also get bulk purchases and discounts
- NSIC helps in credit ratings and allows global recognition to the business
- Under Bill Discounting, MSMEs can apply for loans against their trade bills, provided the bills are verified.
- Udyogini – As the name suggests, the Udyogini scheme is for female entrepreneurs in the country. The scheme works towards promoting and motivating women living in rural and underdeveloped areas. Introduced by the Government and Women entrepreneurs in India, Udyogini is aimed at offering interest-free loans without encumbrance or bias. The loan amount can go up to INR 3 lakhs, and there is no need for collateral.
Did you know out of every 7 entrepreneurs in the country, there is only 1 woman?
- SMILE Scheme – Launched by the Ministry of Social Justice and Empowerment, SMILE stands for Support for Marginalized Individuals for Livelihood and Enterprise. The scheme offers credit facilities for MSMEs on relatively softer terms. For equipment and finance, you can opt for a loan of up to INR 10 lakhs. For other requirements, the loan amount can go to INR 25 lakhs. The long repayment tenure, which can be as high as 10 years, is an added advantage of the SMILE scheme.
Let’s Wrap It Up
With the aim to create an economically prosperous environment, the Indian government has worked towards promoting inclusive growth. Initiatives like “Digital India” and “Make In India” encourage small and big businesses alike to expand their reach. Improved access to finance, simplified procedures, skill development, and technological progress are endeavours that are helping India create a landscape where SMEs can thrive.
With our flexible financial solutions at PaisaDost, we can help you with a simplified and hassle-free loan procedure. Just check your eligibility, complete the online application process and receive the required aid in no time at all.
Get in touch with PaisaDost today!
