Your dream of starting your own business can now come true. The Central Government is running many excellent schemes, through which you can take a loan worth crores of rupees at a low interest rate and without any collateral. With these schemes, lakhs of people can start new businesses or expand their existing businesses. MSME sector plays an important role in the country’s economy; It contributes about 30% to the country’s GDP and provides employment to more than 11 crore people. The government believes that the country cannot progress unless small business owners are empowered.
Therefore, the government has launched several loan schemes; They not only provide capital, but in many cases also provide substantial subsidies and loan facilities without collateral. Among these, ‘Pradhan Mantri Mudra Yojana’ (PMMY) is the most popular. Launched in 2015, the scheme has three categories: Shishu (up to ₹50,000), Kishore (up to ₹5 lakh) and Tarun (up to ₹10 lakh). Under this scheme, loans can be availed for new or small businesses without any guarantee or collateral.
1. PMEGP Scheme
‘Prime Minister’s Employment Generation Program’ (PMEGP) is for those who want to start their own business and create employment opportunities for others. Loans can be up to ₹25 lakh for the manufacturing sector and up to ₹10 lakh for the service sector. This scheme provides subsidy ranging from 15% to 35%, due to which a large part of the loan amount is actually waived off. Its benefit can be availed in both rural and urban areas.
2. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
The ‘Credit Guarantee Fund Trust for Micro and Small Enterprises’ (CGTMSE) offers large loans without collateral, up to ₹2 crore. Under this scheme, the government trust gives a guarantee to the loan granting bank. This is very beneficial for those who do not have assets like land or property. It offers 85% guarantee cover on loans up to ₹5 lakh.
3. Credit Linked Capital Subsidy Scheme
The ‘Credit Linked Capital Subsidy Scheme’ (CLCSS) is designed to help in replacement of old machines with new, modern machines. In this, 15% subsidy is available on loans up to ₹ 1 crore. This increases the production capacity of the factory and provides an opportunity to upgrade the business in the market.
4. SIDBI’s SMILE Scheme
This scheme provides loans with easy terms (soft loans) to help business units grow. Loans up to ₹ 10 lakh can be availed for machinery and up to ₹ 25 lakh for other purposes. The loan repayment period is up to 10 years, allowing small entrepreneurs to easily expand their units.
5. MSME Loan Scheme in 59 minutes
The ‘MSME Loan in 59 Minutes’ scheme is very effective. Businesses filing GST and ITR returns can get loan approval from ₹1 lakh to ₹5 crore in just 59 minutes. This is a completely online process; Time is saved by reducing paperwork.