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MSME Loan Schemes
The Government of India offers a variety of loan schemes for MSMEs or micro, small and medium enterprises. These schemes are designed to help MSMEs access affordable funding to start, grow, and expand their businesses.
Here are some of the most popular MSME loan schemes in India:
Pradhan Mantri Mudra Yojana (PMMY)
Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme offered by the Government of India. It provides collateral-free loans to MSMEs. Under PMMY, loans are provided in three categories:
| Shishu Loans | Up to Rs. 50,000 |
| Kishore Loans | Rs. 50,001 to Rs. 5 lakh |
| Tarun Loans | These loans are from Rs. 5 lakh to Rs. 10 lakh |
Pradhan Mantri Stand-Up India Scheme
This scheme aims to promote entrepreneurship among women, Scheduled Castes (SCs), and Scheduled Tribes (STs). Under this scheme, loans of up to Rs. 1 crore are provided to SC, ST, and women entrepreneurs for setting up new businesses.
Pradhan Mantri Micro Units Development and Refinance Agency (MUDRA) Scheme
MUDRA is a financial institution that provides refinancing to banks and microfinance institutions (MFIs) to enable them to lend to MSMEs. MUDRA provides loans to MSMEs for a variety of purposes, including working capital, term loans, and equipment loans.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Scheme
CGTMSE provides collateral-free loans to MSMEs. Under this scheme, loans of up to Rs. 2 crore are provided to MSMEs for a variety of purposes, including working capital, term loans, and equipment loans.
MSME Business Loans
Banks and NBFCs also offer a variety of business loans to MSMEs. These loans can be used for various purposes, such as working capital, term loans, and equipment loans.
To avail of an MSME loan, you need to contact a lending institution that offers MSME loans. You will need to give a loan application and provide supporting documents, such as your business plan, financial statements, and income tax returns. The lending institution will then review your loan application and decide whether to approve it.
If your loan application is cleared or approved, the authorities will give you a loan agreement to sign. The loan agreement will clearly set out the terms and conditions of the loan, such as the interest rate, the repayment schedule, and the collateral requirements. Once you have signed the loan agreement, the lending institution will disburse the loan to you.
