MSME is considered the backbone of the economy of any country. These include three main categories: micro, small and medium enterprises. The biggest challenges faced by MSMEs are usually related to funding and collateral. Many people have great business ideas, but due to lack of capital they are unable to start their work. Today we will talk about such a special scheme of the government, from which you can take a loan without giving any collateral or guarantee.
**Pradhan Mantri Mudra Yojana (PMMY)**
Under PM Mudra Yojana, you can take a loan ranging from ₹50,000 to ₹20 lakh. These loans are given for small shops, transport business and service sector. The interest rates under this scheme are decided by different banks. No collateral is required to take a loan.
**Prime Minister’s Employment Generation Program (PMEGP)**
PMEGP scheme is specially designed for new entrepreneurs. Under this program, loans up to ₹50 lakh are given for the manufacturing sector and up to ₹20 lakh for the service sector. This scheme focuses on those starting a business for the first time, so that they can take a loan without any guarantee.
**Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)**
CGTMSE scheme is very popular among entrepreneurs who want to avail loan without collateral. Through this scheme, loans ranging from ₹5 crore to ₹10 crore can be taken for manufacturing, service, trade, working capital and machinery. The government provides guarantee cover to banks or NBFCs for these loans.
**PM Swanidhi Yojana**
PM Swanidhi Yojana has been created to benefit entrepreneurs from the most backward sections of the society. The objective of this scheme is to provide working capital to street vendors and street vendors. Loans under this scheme are given in three installments: ₹15,000 (repayable in 12 months), ₹25,000 (repayable in 18 months), and ₹50,000 (repayable in 36 months). This loan does not require any guarantee or collateral. Only 7% interest rate is charged on timely payment.
Where to apply for loan?
These schemes are run by the Central Government and SIDBI. To avail the benefits of any of these schemes, you can approach banks or NBFCs. Based on your project report and past records, your application is classified under the respective loan scheme. The bank will issue the loan after verifying the necessary documents.
