Interest Rate Benefits

Interest Rate Benefits

 

Some of the key financing schemes of the government and public institutions are provided below.


Ministry of MSME

 

Credit Guarantee Fund Scheme for Micro and Small Enterprises

The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector. Both the existing and the new enterprises are eligible to be covered under the scheme. The Ministry of Micro, Small and Medium Enterprises and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises. The scheme was formally launched on August 30, 2000 and is operational with effect from 1st January 2000.

To get details on this scheme, click here.

 

 Scheme of Interest Subsidy Eligibility Certification (ISEC)

The Interest Subsidy Eligibility Certificate (ISEC) Scheme is the major source of funding for the khadi programme. It was introduced in May 1977 to mobilise funds from banking institutions to fill the gap in the actual fund requirement and its availability from budgetary sources. Under the ISEC Scheme, credit at the concessional rate of interest of 4 per cent per annum for capital expenditure as well as working capital is given as per the requirement of the institutions. The difference between the actual lending rate and 4 per cent is paid by the Central Government through KVIC to the lending bank and funds for this purpose are provided under the khadi grant head to KVIC.

To read more on this scheme, click here.

 

SIDBI - Small Industries Development Bank of India

 

Direct Credit Scheme

Under the direct credit scheme, term loan and other forms of assistance such as Working Capital Term Loan and bills discounting are provided to the eligible small and medium enterprises. The scheme can be availed for varied purposes including setting up of a new SSI unit/ service sector unit, expansion / Diversification/ modernisation/ technology upgradation/ quality certification, for undertaking various marketing related activities, for acquisition of additional machinery / equipment, for meeting working capital requirements including gap in MPBF or margin on selective basis.

To get more details on the scheme, click here.
 

 Marketing of SSI products

This scheme provides financial assistance to SSI units to undertake various activities necessary to increase their sales turnover in the domestic and export markets. The scheme also includes finance of corporate entities to enable them to provide support services and/or infrastructural facilities to small scale sector to improve its marketing capabilities.
To get more details on the scheme, click here.

 

Scheme of Cleaner Production (CP) Measures

Under this scheme, financial assistance is provided to existing SME units, in the sectors of leather tanning & finishing, textile wet processing, metal finishing, electroplating and foundries for implementing integrated Cleaner Production measures. The credit under this scheme is available at the interest rate of 8.5% p.a.

For more details on the scheme, click here. 

 

Scheme for Energy Saving Projects in MSME Sector

Under this scheme, financial assistance is provided to MSMEs through SIDBI as well as through refinance to banks/ SFCs and NBFCs to encourage MSME units to undertake energy saving investments in plant & machinery/ production process to reduce energy consumption, enhance energy efficiency, reduce Carbon-dioxide emissions and improve profitability in the long run. The interest rate is within the band given below:


To get more details on the scheme, click here.

 

NSIC - National Small Industries Corporation

 

Bank Credit Facilitation Scheme:

NSIC has tied up with commercial banks namely Central Bank of India, Axis Bank, Yes bank, Bank of Maharashtra, Oriental Bank of Commerce, HSBC, United Bank of India, and Chinatrust Commercial Bank for sanction of term and working capital facilities as per the requirement of Micro,Small & Medium Enterprises.

For more details, click here. 

 

 Bill Discounting Scheme

The Scheme covers purchase / discounting of bills arising out of genuine trade transactions i.e. purchase of supplies made by small scale units to reputed Public Limited Companies / State and Central Govt. Departments / Undertakings.

The rate of interest would be as under (w.e.f 11/05/2009):

  • Assistance against the security of BG/SDR/FDR :

  • Assistance against the security other than those mentioned above:  ( in such cases high Power Acceptance committee at H.O. is empowered to fix the rate of interest on case to case basis.)




For other details on the scheme, click here