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Assignment - 5

The document discusses various funding schemes available for small and medium enterprises (SMEs) in India from the government and other financial institutions. It outlines schemes from the National Bank for Agriculture and Rural Development (NABARD) that provide financial assistance to rural small businesses. It also describes the Market Development Assistance Scheme that funds SME participation in international trade fairs, and MUDRA which has loan schemes up to Rs. 10 lakhs for manufacturing, services, and other sectors. Several other schemes provide subsidies, loans, and credit guarantee for technology upgrades, energy efficiency, manufacturing initiatives, and delayed payments. The overall aim is to empower SMEs and support their growth and development.

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Sneha Dhavale
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24 views

Assignment - 5

The document discusses various funding schemes available for small and medium enterprises (SMEs) in India from the government and other financial institutions. It outlines schemes from the National Bank for Agriculture and Rural Development (NABARD) that provide financial assistance to rural small businesses. It also describes the Market Development Assistance Scheme that funds SME participation in international trade fairs, and MUDRA which has loan schemes up to Rs. 10 lakhs for manufacturing, services, and other sectors. Several other schemes provide subsidies, loans, and credit guarantee for technology upgrades, energy efficiency, manufacturing initiatives, and delayed payments. The overall aim is to empower SMEs and support their growth and development.

Uploaded by

Sneha Dhavale
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment:- 5

AIM: -Visit ab Bank/Financial Institution to enquire about various Funding Schemes for Small Scale
Enterprise

The small-scale business sector, which is more popularly known as the Small and Medium Enterprises
(SME) sector, is responsible for contributing around 40% to the total Gross Domestic Product (GDP) of
India. This sector is a key source of employment in India but faces stiff competition from privately-
funded businesses. Realising this, the Government of India has come forward to offer many loan
schemes to finance the small-scale business sector. These loans can be availed by the SMEs to fund their
day-to-day operations, expand.

National Bank for Agriculture and Rural Development (NABARD):

NABARD was established in 1982 with the sole objective of development of Agriculture based rural
businesses in India. It offers financial assistance to various small scale industries of rural India viz;
cottage industry, dairy farming, and other village industries

NABARD lays emphasis on continuous social innovations in the rural areas. Apart from providing funds,
NABARD helps rural businesses to establish a framework that works well for them. It works in tandem
with the State and Central Governments and the RBI in establishing a well-oiled mechanism for the
general upliftment of the rural MSME sector.

Market Development Assistant Scheme for MSMEs:

Another premise for our Indian MSMEs, that could take them to International community, but left
unexplored due to lack of funds, is the International Trade Fairs and Exhibitions. For this purpose, the
government set up the Market Development Assistance Scheme for MSMEs. This scheme aims at
funding MSMEs in showcasing their products and services at the MSME India Stall in major International
Trade Fairs and Exhibitions. This scheme offers partial reimbursement of the One-time registration fees
or annual fees or similar fees paid by the MSMEs to participate in the trade fairs.

There are a number of resources available for budding entrepreneurs to realize their dream of owning a
business. These government schemes are aimed at empowering every individual to build their business
with minimal hassle. Because, it is an established fact that MSMEs are the backbone of any economy
and their growth and development should be the core agenda of the government.

MUDRA – Micro Units Development & Refinance Agency Ltd:

 Refinance support to banks and NBFCs to facilitate higher funds available for lending.
 Onward lending to business entities involved in manufacturing, trading, services, tractor
financing, agriculture and allied activities, and two-wheeler loans.
 MUDRA also empowers MSME entities through financial literacy and other social support
services in addition to financial assistance.
 MUDRA has three loan schemes under it – Sishu loan up to Rs. 50000, Kishore loan up to Rs.
5,00,000 and Tarun loan up to Rs. 10 lakhs.

Technology Upgradation Fund Scheme for the Textile Industry (TUFS):

 Available for both new and existing MSME textile units.


 Along with SIDBI, 36 Nodal banks have been assigned to disburse funds under this scheme.

Credit Linked Capital Subsidy Scheme (CLCSS):

 Facilitate technology upgradation of MSME units in specific products.


 15% capital induction for well-established and improved technologies.
 SIDBI and NABARD are the principal institutions for fund disbursement.
 Nine nodal banks have been inducted to work along in the scheme.

Technology and Quality Upgradation Support to Micro, Small & Medium Enterprise (TEQUP):

 Aimed at encouraging energy efficient projects.


 EET Machinery having 15% or more energy saving capability are eligible to apply for this fund.
 SIDBI and Nodal banks act as primary lending institutions for quicker loan disbursal.
 A maximum of 25% of the project cost or Rs. 10 lakh can be availed as loan amount.

SMILE – to develop Make In India initiative:

 Loans issued in the form of Quasi-Equity.


 New and existing MSME units in manufacturing sector or service sector undertaking expansion
can avail this loan.
 Minimum loan size is Rs. 25 lakhs.
 Attractive rate of interest starting from 8.36%.
 Repayment tenure of up to 120 months.

MSME Receivable Refinance Scheme (MSME RFS):

 Assist MSMEs with delayed payments with respect to their credit sales to large purchaser
companies.
 Offers them finance against bills of exchange/invoices arising out of such sales.

The Credit Guarantee Fund Scheme for Micro and Small Enterprises:
 Under this scheme, loan can be applied without any collateral.
 New and existing MSME units involved in manufacturing or service sector can apply.
 Retail trade, Educational institutions, Agriculture and Self-Help Groups (SHGs) are excluded.

Apart from SIDBI, the Government of India has set up numerous other financial institutions for the
progress and development of the MSME sector across the country.

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