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The MSME sector in India serves as the backbone of the Indian economy. This sector has more than 6.33 crore business units, out of which, 90% of them are Micro Enterprises. The MSME sector provides employment to more than 12 crore Indians across the country. The Government of India has a number of schemes to boost the credit, marketing, and infrastructure support to this unorganized sector.
NSIC, National Small Industries Corporation, is an ISO 9001-2015 certified Government of India Enterprise under the Ministry of Micro, Small and Medium Enterprises (MSME). The primary objective of NSIC is to promote, aid, and foster the growth of micro, small, and medium enterprises in the country. NSIC is set up with the objective of promoting and supporting Micro, Small & Medium Enterprises (MSMEs) Sector by providing cohesive support services encompassing Marketing, Technology, Finance, and other services. It supports deserving MSMEs with various services like credit support, technological assistance, marketing strategies, and providing enhanced Government connectivity services.
Credit Support through NSIC is available through the following schemes:
About Bank Credit Facilitation Scheme
The primary objective of the scheme is to assist MSMEs in accessing credit support, both fund based and non-fund based limits, from the banks. For this, the NSIC has entered into a Memorandum of Understanding with various Nationalized and Private Sector Banks. Along with arranging for credit support, NSIC also offers handholding support relating to the submission of the loan application and follow up with the banks.
Objectives of the Credit Facilitation through Banks Scheme
Key features of the Credit Facilitation through Banks Scheme
NSIC has tie-up arrangements with various public sector and private sector banks for the Credit Facilitation Scheme. The MSME Unit can approach any of the bank branches that have a tie-up with NSIC, and submit their loan application directly. An NSIC official will be available at the branch to provide hand-holding support to the applicant. They will assist them in completing all documentation as required for further submission to the bank. The application form can also be downloaded from the NSIC portal.
All existing MSME units as well as units applying for fresh loans are eligible to apply for an MSME Loan through the Credit Facilitation Scheme.
Classification of Micro, Small and Medium Enterprises
Any manufacturing enterprise in which the original value of investment in plant and machinery is up to Rs. 25 lakhs
Any service enterprises in which the original value of investment in equipment is up to Rs. 10 lakhs
Any manufacturing enterprise in which the original value of investment in plant & machinery is above Rs. 25 lakhs and up to Rs. 500 lakhs
Any service enterprise in which the original value of investment in equipment is above
Rs. 10 lakhs and up to Rs. 200 lakhs
Any manufacturing enterprise in which the original value of investment in plant & machinery is above Rs. 500 lakhs and up to Rs. 1000 lakh
Rs. 200 lakhs and up to Rs. 500 lakhs
The list of documents to be submitted varies based on the purpose of the loan. However, given below is a general list of documents to be submitted:
The credit support is need based. Term Loan limits are fixed by the bank. For units requiring working capital limits up to Rs. 5 crores, requirement is assessed as 25% of the projected turnover for the next year. The working capital limit shall then be 20% of the projected turnover and the balance shall be arranged by promoters through equity / loans. For limits above Rs. 5 crores, the Maximum Permissible Bank Finance Method is used to determine the working capital requirement.
The repayment tenure varies from 5 to 7 years and depends on the income generation from the unit. Some exceptional cases are given up to 11 years’ repayment tenure.
For Working capital finance limits, they are valid for one year and repayable on demand. Self-liquidating loans like bill finance, export credit etc. are linked to the natural period of the transaction.
The interest rate depends on the bank.
1. Who are the target clients who can avail loan under NSIC’s Credit Facilitation Scheme?
2. Is there any cost for applying for a loan under this scheme?
No, there is no fee charged from the MSMEs for applying a loan under this scheme.
3. Which are the lending institutions approved to lend loans under the Credit Facilitation Scheme?
The Banks (both public sector and private sector) and Financial Institutions which have entered into Memorandum of Understanding (MOU) with NSIC are approved to lend loans under the Credit Facilitation Scheme.
4. What are the types of loan facilities available for MSMEs under the Credit Facilitation Scheme?
This scheme offers both fund-bases and non-fund based support from the banks:
5. Is KYC compliance mandatory for availing loans under this scheme?
Yes, the loan applicants should be KYC compliant. They should open an operative account (Savings /Current Bank Account) with proper introduction, address proof, ID proof and photo etc. as stipulated by the bank.
6. Do I have to submit any security or collateral for the loan?
The security and collateral policy depends on the lending bank and varies from bank to bank. Customers should check with the bank on these aspects before submitting the application.
Atal Innovation Mission
Coir Udyami Yojana
Khadi And Village Industries Commission
Mahila Samriddhi Yojana
National Skill Development Corporation
National Small Industries Corporation
Pradhan Mantri Kaushal Vikas Yojana
Pradhan Mantri Mudra Yojana
Pradhan Mantri Rojgar Yojana
Prime Minister Employment Generation Programme
Small Industries Development Bank Of India
Stand Up India Scheme
Unemployed Youth Employment Generation Programme
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