Tag: SIDBI

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Finance

5 Types Of Small Business Loans Entrepreneurs Can Take At Low Interest!

5 Types Of Small Business Loans Entrepreneurs Can Take At Low Interest!
5 Types Of Small Business Loans Entrepreneurs Can Take At Low Interest!

Summary: Finding the right source of funding for your business? These government schemes can help you to take your business to new heights of success.

When starting a small business funding is crucial. What makes it a daunting process is finding the right source. There are many banks and schemes through which entrepreneurs can take small business loans. Entrepreneurs can take small business loans in two ways: they can either take loans through government schemes or they can take loans from private players.

The government of India also offers relief in the form of collateral-free loans, subordinated debts, and equity infusion through its Fund of Funds (FoF) scheme, which proposes to buy up to 15% growth capital in high-credit MSMEs.

Many government schemes are made to empower SMEs. Among various schemes, the key government schemes include MSME Business Loans for Start-ups in 59 minutes, Pradhan Mantri Mudra Yojana, and SIDBI Make in India Soft Loan Fund for MSMEs.

Here is a list of other government schemes for small scale businesses:

1. Loans for Startups in 59 Minutes

Launched in 2018 this central government-backed small-scale industrial loan is famous for the loan eligibility that is conveyed to the applicant in just 59 minutes. Though, the actual process might take eight to 12 days.

A loan via this scheme attracts an interest rate starting from 8.50%. Also, the interest rates are based on the nature of your business and your credit rating. This scheme offers loans ranging from a minimum of INR 1 lakh to a maximum of INR 5 crore. A 3% reservation for such loans is available for women entrepreneurs.

2. Pradhan Mantri Mudra Yojana (PMMY)

To provide business finance to micro-businesses the Government of India established the Micro units’ development and refinance Agency (MUDRA). The Pradhan Mantri Mudra Yojana (PMMY) administered by MUDRA is a small-scale industry loan by the central government with the intent to “fund the unfunded”.

This scheme offers a wide range of sectors and business activities. MSMEs can take up to INR 10 lakhs without collateral. This scheme is called MUDRA loans. All types of trading, manufacturing, and service businesses can apply to this scheme.

3. SIDBI Make In India Soft Loan Fund For MSMEs (SMILE)

SMILE is a government loan scheme by the Government of India that offers loans with below-market interest rates, also known as soft loans. This small business lending scheme is governed by the Small Industries Development Bank of India (SIDBI). The minimum loan amount under this scheme is INR 25 lakh. The interest rate starts at 8.36%, the scheme comes with a moratorium period of 36 months. The maximum repayment tenure is 10 years. New MSMEs, along with existing service and manufacturing sectors, can apply for this scheme.

4. Credit Guarantee Fund Trust for Micro And Small Enterprises (CGTMSE)

This government loans scheme offers central government small-scale industries loans to the MSME sector. This scheme provides working capital loans of up to INR 10 lakh without any collateral. Credit facilities up to INR 1 crore can be availed after mortgaging your business land or assets.

New or existing MSMEs in service or manufacturing activities, agricultural and educational institutions, and self-help groups are eligible for this scheme.

5. Stand Up India

The Stand-Up India initiative seeks to provide government small business loans to women entrepreneurs and individuals under the scheduled caste or scheduled tribe category. It was launched by the Small Industries Development Bank of India (SIDBI) and it provides loans to small businesses between INR 10 Lakh to INR 1 crore. The amount will cover around 75% of your business project and its interest rate is calculated as the bank’s marginal cost of funds-based lending rate (MCLR) + 3% + tenure premium.

These are the government schemes that entrepreneurs can use to raise funds for their small businesses. We know what you are thinking! The idea of managing a business is easier said than done and we completely agree with you. This is why to help you move forward with your business goals, we at Bada Business Problem Solving Courses  & LFP Bada Business (Leadership Funnel Program).

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MSME

SIDBI Joins Hands With Global Alliance For Mass Entrepreneurship To Help MSMEs Revive

SIDBI Joins Hands With Global Alliance For Mass Entrepreneurship To Help MSMEs Revive
SIDBI Joins Hands With Global Alliance For Mass Entrepreneurship

The Small Industries Development Bank of India (SIDBI) and the Global Alliance for Mass Entrepreneurship (GAME) have entered into an MoU to help the MSMEs overcome their challenges that were elevated during the pandemic, along with the longstanding capacity gaps in the sector.

The MoU covers vast themes that include expanding credit access, building competitive clusters, increasing formalization, and improving the legal framework for ease of doing business.

Both the organizations also committed that 25 percent of the beneficiaries from the partnership would be women entrepreneurs.

The partnership will also focus on areas that include scaling up Udyam Registration as a unique ID for an MSME to access schemes across the entire MSME universe, leveraging SIDBI`s financial schemes to further formalize enterprises, among others.

According to GAME Co-founder Mekin Maheshwari, “This long-standing experience combined with the force of GAME`s 80+diverse partner alliance should ease the access to credit and a range of new support services for MSMEs at large scale.”

“We hope the power of the Alliance can be leveraged for nation-building efforts such as formalizing MSMEs and substantially improving access to credit & non-financial services,” said SIDBI Chairman and Managing Director, Sivasubramanian Raman.

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MSME

SIDBI Collaborates with NSE to Develop Debt Capital Platform for Firms in MSME Sector

NSE and SIDBI | Representational Image (Photo Credits: Wikimedia Commons)
NSE and SIDBI | Representational Image (Photo Credits: Wikimedia Commons)

The micro, small and medium enterprises are blooming in the country with various government and non-government agencies undertaking several schemes and programmes to increase the investment flow for the firms in the sector. Massive inflow of funds has also helped the sector to stay afloat in even as major business industries suffered and incurred losses owing to the economic slowdown induced by the lockdown imposed to curtail the spread the coronavirus. The MSME sector frayed pretty well in the COVID-19 era as well.

There are various initiatives by public and private sector banks offer equity-based finance to the micro, small and medium enterprises. Even the non-banking financial institutions have extended schemes to support the firms in the MSME sector. However, the need to develop to additional debt and equity instruments to create more financial solvency and soundness in the sector. It is important for the overall development of the sector- capital intensive and labour incentive both. Startups and MSMEs in India Get Major Boost As Indian Bank Signs MoU With SID of IISc for Extending Exclusive Credit Facility to Businesses.

Recently, the National Stock Exchange (NSE) entered into an agreement with the Small Industries Development Bank of India (SIDBI) to explore the feasibility of a debt capital platform for the micro, small and medium enterprises. “Keeping in view the large and diversified MSME sector in the country, there is a continuous need for various institutions to co-ordinate and co-operate with each other for the benefit of MSME sector,” V Satya Venkata Rao, Deputy Managing Director of the Small Industries Development Bank of India told the reporters in this contest. MSMEs in Haryana Get Major Boost! Products Manufactured by MSMEs in the State To Get Global Market, Talented Artisans To Benefit.

Taking about the collaboration he said that both the institutions (NSE and SIDBI) run several programmes for the enterprises in the MSME sector, adding that the co-operation will help increase the impact and reach of these programmes. Rao also said that an expert committee on MSMEs, headed by U K Sinha, the former Chairman of Securities and Exchange Board of India (SEBI) has made several recommendations for the micro, small and medium enterprises, including the need to develop additional instruments for debt and equity, which will help crystallise new sources of funding for MSMEs.

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MSME

Credit Guarantee Trust for MSEs: Over 8 Lakh Entrepreneurs Get Credit Guarantee Under Scheme Run by MSME Ministry and SIDBI

MSME Ministry (Photo Credits: Wikimedia Commons)
MSME Ministry (Photo Credits: Wikimedia Commons)

The central government has launched several schemes to promote women entrepreneurship in the country as well as boost the Micro, Small and Medium Enterprises. One such schemes is the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). It has operated by the MSME Ministry in collabroation with the Small Industries Development Bank of India (SIDBI). Under this scheme, the agencies offer credit guarantee to financial institutions to provide collateral-free loans to MSEs. As per the recent government data, under this scheme guarantee of Rs 45,215.35 crore in 8,38,947 loan accounts have been approved in fiscal year 2020. 4,35,520 accounts were extended guarantee under the scheme in the previous financial year. Union Budget 2021: Here Is What the First Paperless Budget Has In Store for the MSME Sector.

As many as 67,171 loan accounts of female entrepreneurs totaling to Rs 3,366.63 Crore have been approved under the scheme in the current financial year. Women entrepreneurs in Tamil Nadu got the maximum approval of Rs 394.50 crore on 8,593 accounts. It was followed by Uttar Pradesh where 6,289 accounts were approved for Rs 334.59 crore). Madhya Pradesh with 5,927 accounts approvals for Rs 215.42 crore and , Andhra Pradesh with 5,208 approvals for Rs 143.16 crore stood third and forth respectively. Meanwhile, 4,776 accounts were provided guarantee for Rs 295.22 crore in Karnataka . MSMEs in India: Govt Aims To Raise MSME Sector’s Share in GDP to 40% From the Current 30% To Benefit Rural Poor, Says Nitin Gadkari.

Continuing its efforts to develop and promote the MSMEs in India, the Union Budget 2021 also provided a share fair of public expenditure to the sector. In the budget for the upcoming financial year, Finance Minister Nirmala Sitharaman has allocated a fund of over Rs 15,000 Crore to the Micro, Small and Medium Enterprises, which stands at double the amount apportioned to the sector last fiscal. “We have taken a number of steps to support the MSME sector in this budget. I have provided Rs 15,700 crore more than double the previous year,” said the Finance Minister