Government Business Loan Schemes

There are various business loan schemes started by the Government of India that can be chosen smartly. Visit to know the loans here!

15 Sep,2022 12:58 IST 569
Government Business Loan Schemes

Micro, Small, and Medium enterprises (MSMEs) solve economic problems like unemployment, income inequality, and many others. The MSME sector is responsible for providing employment to millions of people in the country and recruiting talents from different parts of the world that contribute significantly to the country’s GDP. However, this endeavour requires funds.

This article discusses the various Government business loan schemes of India.

Business Loans By Government

Being the largest employer, the MSME sector contributes almost 30% to the overall GDP of the country. The Government of India offers various credit schemes to strengthen MSMEs and encourage sector-specific activities.

Government loan schemes provide financial support to MSMEs for business activities and drive expansion. A few of those schemes include

1. MSME Loan In 59 Minutes

Under this scheme, MSMEs can get a loan of up to INR 5 crore (minimum INR 1 lakh) in under 59 minutes at an interest rate of 8.5% from public and private banks and NBFCs.

This scheme is also known as the “PSB Loan in 59 minutes,” in which the Government of India introduced a quick loan portal for businesses who need funds quickly to expand. Eligible factors include:

• Income/Revenue
• Borrower’s repayment capacity
• Existing credit facilities
• Lender-specific factors

2. Pradhan Mantri MUDRA Yojana (PMMY)

“MUDRA” in the Pradhan Mantri MUDRA Yojana stands for Micro Units Development and Refinance Agency Ltd. It offers support to the banks and NBFCs for lending to Micro units with a loan requirement of up to INR 10 lakhs under this scheme. According to the growth and development stage, MUDRA divides the loan category into:

• Shishu: Loan coverage up to INR 50,000 at an interest rate of 1% to 12% per annum
• Kishore: Covers a loan amount between INR 50,000 to INR 5 lakhs at 8.6% to 11.5% per annum
• Tarun: This category gives a loan coverage of up to INR 10 lakh (minimum INR 5 lakh) at 11.15% to 20% per annum

3. Credit Guarantee Fund Scheme For Micro And Small Entreprises

Under this scheme, the Government of India allows a collateral-free loan to the MSME sector up to INR 200 lakh. Existing or newly established businesses engaged in manufacturing or service activity are eligible to avail of the benefits of this scheme.
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4. National Small Industries Corporations (NSIC)

NSIC is an Indian Government enterprise under MSMEs with an ISO certification. It extends its support services across the country, including finance, marketing, credit, technology, and other allied solutions.

5. Credit Linked Capital Subsidy Scheme (CLCSS)

The primary objective of this scheme is to provide technology advancement to MSMEs. This scheme majorly focuses on rural and semi-urban areas. It provides a 15% subsidy on investment in eligible machinery with a cap of INR 1 crore on the subsidy.

Apply For A Business Loan With IIFL Finance

IIFL Finance is a leading business loan scheme provider to MSMEs. We offer quick loans that are perfect for MSMEs with small financial requirements up to INR 30 lakh. You can check the business loan interest rate at your nearest IIFL Finance branch or online.

The entire process, from application to disbursement, is 100% online. The disbursals are quick and take 24-48 hours. You can fulfill various business needs and repay them per your preferred cycle. Apply for an IIFL Finance business loan today!

Frequently Asked Questions

Q.1: Why is the government of India providing business loan schemes?
Ans: The government is trying to support the MSMEs of the country with business loan schemes as the sector contributes around 30% to the overall GDP of the country.

Q.2: What are the various government business loan schemes available?
Ans: MSME Loan in 59 Minutes, Pradhan Mantri MUDRA Yojana (PMMY), Credit Guarantee Fund Scheme, National Small Industries Corporations (NSIC), and Credit Linked Capital Subsidy Scheme (CLCSS) are among the business loan schemes available for MSMEs.

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