/dqc/media/agency_attachments/3bO5lX4bneNNijz3HbB7.jpg)
Follow Us/dqc/media/post_banners/wp-content/uploads/2017/05/Alternative-Financing-Options_0.jpg)
The Indian government has devised several loan schemes/ financing packages to provide credit to MSMEs, and the banking sector and financial institutions also lend to them.
MSME credit packages for the service industry assist young entrepreneurs in establishing their businesses. MSME programs for SC-ST business owners are also accessible. Because they lack resources and technology, these industries or firms represent the backbone of our economy and require aid and protection from other large corporations. To do this, the government offers these businesses various programs, incentives, and counseling.
The following are some of the most well-known MSME financing packages, which have become popular due to business disruptions caused by COVID-19.
Pradhan Mantri Mudra Yojana (PMMY)
MUDRA is a non-banking financial institution (NBFI) that promotes the growth of SMEs. MUDRA assists banks, microfinance institutions (MFIs), and non-bank financial companies (NBFCs) in refinancing loans to micro-units with loan requirements of up to ten lakhs. Commercial banks, small finance banks, MFIs, and NBFCs give loans under this plan. Borrowers can apply for loans at any of these lending institutions or through the UdyamiMitra portal.
There are three central schemes under the PMMY scheme: 'Shishu,' 'Kishore,' and 'Tarun,' which indicate the level of development or growth and the funding need of the beneficiary micro-units or entrepreneurs, as well as providing a reference point for the next step of graduation or growth.
Udyog Aadhar Memorandum Scheme
This scheme replaces the SSI Registration or MSME Registration process that existed previously. For MSME registration, the traditional method was filled with paperwork and filings. With this system, just two forms are required for registration: Entrepreneur Memorandum-I and Entrepreneur Memorandum-II, which replace the old 11 forms.
The procedure is entirely free and takes place entirely online. MSMEs who register using Aadhaar are eligible for MSME loans, government incentives, and hassle-free bank accounts in the MSME's name, among other benefits. In total, the initiative has registered roughly two lakh small-scale enterprises in the MSME category, transforming the sector into one that is well-organized and provides optimum benefits. The MSME program for SC/ST entrepreneurs is recognized independently by the system, and they are eligible for MSME scheme advantages.
Women Entrepreneurship
Women entrepreneurs are in little supply, accounting for only 14% of all entrepreneurs. Many programs provide rewards and skill training to young women who want to pursue entrepreneurship and MSMEs as a career option to promote and cater to their potential. MSME programs for entrepreneur’s pdf are unrivaled in terms of offering assistance tailored to women. The program assists women who lack the necessary educational background to handle entrepreneurship by providing training in the sector. Every year, the award for "Outstanding Women Entrepreneur" is given. The prize is given to honor the accomplishments and inventions of female entrepreneurs, therefore promoting female entrepreneurship. Other additional schemes can be used to achieve the same goal. Money Generating Scheme is one such program, which combines training with income generation through business activity. This program strives to help women become financially secure and self-sufficient by funding their ideas and small businesses. Bright women entrepreneurs can also apply for a government MSME loan.
Zero Defect Zero Effect Scheme
The Defect-Free Guarantee the ZED strategy, or Zero Effect Scheme, appeals to the industrial industry. It asks for the manufacture of goods with zero flaws, resulting in higher quality products and the creation of goods in an environmentally sustainable manner, resulting in a 'zero effect' environment. The ZED maturity evaluation approach was created to certify manufactured items on various levels, including safety, performance, and environmental stewardship. Exporters to other countries will benefit significantly from the MSME scheme.
Credit Linked Capital Subsidy scheme
This CLCSS scheme offers MSMEs a capital subsidy of up to 15% to help them keep up with technological improvements. Its goal is to supply MSMEs with cutting-edge, timely technology for their facilities and machinery. MSMEs, such as those dealing with khadi, coir, and village units, will benefit from the scheme. The scheme will cover institutional capital used by these companies to develop a well-established and improved technology. MSME Schemes for Startups are also offered through this plan, and any startup that requires technological improvement can apply
Incubation
The government fosters fresh and innovative ideas, such as new designs and products, through the incubation program. Host Institutions (HI) investigating and implementing new ideas in their particular service areas receive financial aid from the government. The financial assistance covers 75-85% of the project costs, up to a maximum of INR 8 lakhs. This program actively supports technological advancements and knowledge developments by providing financial support for innovative ideas. The ability of a company to innovate determines its eligibility for MSME programs.
By Aditri Priya, DQ Channels