Entrepreneurship in India is rising, and government loan schemes help fuel this growth by offering critical financial support. These schemes are designed to cater to businesses at various stages, from new startups to well-established enterprises looking to expand.
This blog post aims to illuminate the top 7 government business loan schemes in India, helping entrepreneurs benefit from them.
List of Top 7 Government Business Loan
1. Pradhan Mantri Mudra Yojana (PMMY)
Launched under the Pradhan Mantri MUDRA Yojana (PMMY), Micro Units Development and Refinance Agency (MUDRA) loans are designed to fund micro and small enterprises. The scheme offers loans under three categories: Shishu (loans up to ₹50,000), Kishore (loans from ₹50,000 to ₹5 lakh), and Tarun (loans from ₹5 lakh to ₹10 lakh). The interest rates vary from bank to bank, and the repayment period can extend up to 5 years.
2. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS)
Implemented by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), this scheme provides collateral-free credit to micro and small enterprise sectors. Both new and existing enterprises can avail loans up to ₹2 crore. The scheme aims to strengthen financial support to micro and small businesses, thereby promoting their growth and development.
3. Stand-Up India Scheme
Introduced with the vision of promoting entrepreneurship among women and Scheduled Caste (SC) or Scheduled Tribe (ST) candidates, the Stand-Up India scheme offers loans between ₹10 lakh and ₹1 crore. These loans are given to establish a new manufacturing, trading, or service enterprise. The scheme has facilitated many women and SC/ST entrepreneurs to set up their businesses and contribute to the nation’s economic growth.
4. National Small Industries Corporation (NSIC) Subsidy
National Small Industries Corporation (NSIC) offers two funding schemes: Raw Material Assistance (RMA) and Marketing Assistance. RMA helps small businesses fund the cost of raw materials, both indigenous and imported. The Marketing Assistance scheme helps small enterprises showcase their products at international and national trade fairs.
5. Credit Link Capital Subsidy Scheme for Technology Upgradation
Operational under the Ministry of Small Scale Industries, this scheme aims to facilitate technology upgradation in small businesses. Under this scheme, a 15% upfront capital subsidy is provided to SMEs on loans up to ₹1 crore. The scheme is primarily for technology upgradation in specified sub-sectors/products.
Check Government Schemes For Startups
6. Prime Minister’s Employment Generation Programme (PMEGP)
PMEGP is a credit-linked subsidy programme that generates self-employment opportunities by establishing micro-enterprises in the non-farm sector. The maximum cost of projects under this scheme is ₹25 lakh for the manufacturing sector and ₹10 lakh for the service sector, with a subsidy of 15%-35%, depending upon the beneficiary category.
7. Small Industries Development Bank of India (SIDBI) Loans
The Small Industries Development Bank of India, also known as SIDBI, is a leading institution that provides government business loans. Its primary focus is to help Micro, Small, and Medium Enterprises (MSMEs) that urgently need financial aid. SIDBI offers direct and indirect loans through other financial organizations like Non-Banking Financial Companies (NBFCs) and Small Finance Banks (SFBs)
SIDBI’s loan program offers loans ranging from Rs 10 lakhs to 25 crores with a loan repayment period of up to 10 years. A standout feature of SIDBI’s loans is that a large loan of Rs 1 crore can be taken without needing to provide any collateral.
Also, read Pradhan Mantri Gramin Awas Yojana
Summing Up
In conclusion, these government business loan schemes are a testament to India’s commitment to nurturing its entrepreneurial ecosystem. They provide financial support and bring about inclusive growth by targeting diverse sections of society, including women, SC/ST, and the coir sector. These loan programs make it easy for Indian businesses to get money. This helps businesses grow, create jobs, and boost the country’s economy.
