The full form of MSME is micro, small, and medium enterprise. In the indigenous language, we call it small and medium scale business. The biggest feature of MSMEs is that they can be started with fewer resources and in less space and due to which better profits can be made.
Small and medium businesses have a very important contribution to the development of any developing country. The contribution of MSMEs to India’s development can be explained by the fact that the MSME sector alone accounts for 29% of India’s GDP.
MSMEs are also playing the role of a major pillar in India in terms of employment. A total of 12 crore people in India are employed in micro, small and medium industries i.e. MSME. In this way, the MSME sector is playing a huge contribution to India.
In 2019, the then Finance Minister, Late Arun Jaitley, while presenting the financial budget, said that India is to be made a country with an economy of $ 5 trillion by 2024. For this purpose, he expressed great confidence in MSMEs. Also said that in the next 3 years, the share of MSME in GDP has to be increased from 29% to 50%.
MSME’s share of the country’s GDP by 50% means that the MSME sector will boom. To boost the MSME sector, a huge amount of investment is required. We are all aware that the MSME sector has been struggling with a shortage of capital for a long time. However, the then Finance Minister has started the MSME loan scheme to get rid of the financial problems of the MSME sector.
What is MSME Loan Scheme?
The main problem of the MSME sector is the non-availability of sufficient funds. Because which MSME sector has been struggling for a long time. A large number of MSMEs have also been closed during the last several years. In such a situation, the MSME loan scheme is like an elixir of life for the MSME sector. The MSME loan scheme is a scheme under which the central government has made arrangements to provide business loans to the needy MSMEs at a lower interest rate, for a longer duration, and without any guarantee.
Many business loan schemes are being run under the MSME loan scheme. All loan schemes are aimed at ensuring the availability of funds to the MSME sector. The following MSME loan schemes are in operation:
- Pradhan Mantri Mudra Loan Scheme
- Credit Guarantee Loan Scheme for Micro and Small Enterprises (CGTMSE)
- PMEGP (Prime Minister Employment Generation Program)
- ZipLoan MSME Business Loan Scheme
Complete Information About Pradhan Mantri Mudra Loan Scheme
Mudra Loan Scheme has been launched in 2015 by the Ministry of Micro, Small and Medium Enterprises, Government of India. The main goal of this scheme is to keep the business of small and medium scale businesses alive by giving that financial help. Under the Mudra Loan Scheme, small & medium businesses are given collateral-free loans up to Rs 10 lakh in 3 categories.
For information, let us tell you that to take a loan from the Mudra Scheme, first of all, the bank and financial company included in the list of Mudra scheme will have to be selected. Under this scheme, 27 government banks, 17 private banks, 31 rural banks, 4 co-operative banks, and 25 non-banking financial companies (NBFCs) in the country have been authorized to give loans under the Mudra Yojana. The three categories in which loans of up to Rs 10 lakh are given are the following categories:
| Sr. No. | Scheme | Loan Amount |
| 1 | Shishu Loan | Loan up to Rs. 50 thousand |
| 2 | Kishore Loan | A loan from 50 thousand to 5 lakh rupees |
| 3 | Tarun loan | A loan from Rs 5 lakh to Rs 10 lakh |
Documents Required For Taking A Loan From Mudra Yojana
Under the Mudra scheme, some paper documents are required to take a loan. The list of documents which are required is as follows:
- 2 Photos
- Photocopy of identity card – any ID proof issued by the government, such as Aadhaar card, PAN card, Voter card, passport, bank passbook, driving license, etc. Here it has to be kept in mind that whatever identity card you are giving a photocopy of, you have to self-attest it.
- Photocopy of address certificate – Any government–issued address certificate that proves that you live at that address, like Aadhar card, residence certificate, electricity bill, water bill, etc. This copy will also have to be self-attested
- Copy of bank statement – it should be at least 3 months old
- Copy of caste certificate (if you are from reserved caste and want to take advantage of it then you will need it)
- Business address certificate – Business identity and address proof must be submitted with a license, registration certificate, or any other document related to your business. This is proof that you are the owner of that business.
- If you want to take a currency loan to buy machinery in business, then you can put a copy of the value of that machinery. If you are putting a copy of the machinery bill, then you will also have to give the name of the machinery provider, the report of what will be positive in your business from the arrival of the machine, and how much raw material will be required.
Complete Information About Credit Guarantee Loan Scheme For Micro And Small Enterprises (CGTMSE)
The Credit Guarantee Loan Scheme for Micro and Small Enterprises (CGTMSE) scheme has been launched by the Central Government for small and medium-class businessmen to get loans against the government guarantee. Under this scheme, MSME traders do not need any third party to get a loan.
Let us inform you that the Credit Guarantee Fund Trust (CGTMSE) has been set up under a joint venture between the Ministry of Micro, Small and Medium Enterprises, and Small Industries Development Bank of India (SIDBI), Government of India. On guarantee of this fund, micro, small and medium enterprises from the nominated bank to a maximum of Rs 2 crore. Loans up to Rs.
The relief package was announced by the Finance Minister to bring the stable economy back on track due to the lockdown. That declaration also included that the Credit Guarantee Fund Trust (CGTMSE) would also recommend loans for MSMEs who are in a state of economic stress. Provision has been made to sanction loans up to Rs 1 crore to MSMEs facing financial stress.
Important Facts Regarding Credit Guarantee Fund Trust (CGTMSE)
- The basic goal of the CGTMSE scheme is to guarantee loans to financial institutions providing loans to MSMEs which means that the guarantee of a loan to MSME is taken by the Credit Guarantee Fund Trust (CGTMSE) itself.
- Part of the loan of the MSME is paid by Credit Guarantee Fund Trust (CGTMSE) for the MSMEs who cannot repay the loan within the stipulated time. This eliminates the fear of new businessmen taking loans.
- Credit Guarantee Fund Trust (CGTMSE) guarantees repayment of 85% of funds for loans up to Rs 5 lakh.
- For loans up to Rs 50 lakh, repayment is guaranteed at 75% or in some cases at 85% money.
- 50% Guarantee of the money is given for Loans up to Rs 50 lakh and below Rs 100 lakh In case the loan is taken in the name of a woman trader or taken in the North East Region (NER), then the Credit Guarantee Fund Trust (CGTMSE) guarantees a maximum repayment of 80% of the maximum 50% of the money on the loan.
ZipLoan MSME Business Loan Scheme
ZipLoan is the premier company providing business loans to MSME businesses in the country’s micro, small, and medium enterprises. ZipLoan is the country’s premier non-banking financial company, offers business loans of up to 7.5 lakh to businessmen, without any mortgage, in just 3 days on minimum documents.
Applying for a business loan from ZipLoan is very easy, as the entire process of applying for a business loan from ZipLoan is completely online. After applying online, the loan officer of the company contacts the customer and completes the process of giving a business loan.
Eligibility For A Business Loan From ZipLoan
- Business is more than 2 years old
- The annual turnover of the business is more than 10 lakhs
- ITR filed last year should be more than 1.5 lakh
- One of the house or place of business is in the applicant‘s name (It is valid even if it is in the name of parents, siblings, husband and wife, sons and daughters.)
Documents Required For Business Loans From ZipLoan
- Copy of Aadhaar card
- PAN card copy
- Business registration proof
- Copy of filing ITR
- Proof of ownership of one of the houses or places of business (It is valid even if it is in the name of parents, siblings, husband-wife, son-daughter).
Advantage Of Taking A Business Loan From ZipLoan
- Business loan in just 3 days * ZipLoan understands the need for money for businessmen, that’s why business loan is provided in just 3 days *.
- Business loans on very low terms
- Minimum documents required: Minimum documents are required for a business loan
- Top–up loan facility: It is understood by ZipLoan that businessmen need more money, so customers who deposit 9 EMI of their existing business loan on time are given a business loan at a lower interest rate than the first business loan.