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UCO Bank MSME Loan

Overview

MSMEs (Micro, Small and Medium Enterprises) are the backbone of the economy and play a crucial role in strengthening rural as well as urban zones. With that said, most MSMEs in India are strapped for working capital. Unlike big corporate companies that can easily avail loans at banks and NBFCs, MSMEs have a hard time raising the required capital.

This is where MSME loans from UCO Bank come into the picture. UCO Bank offers a wide range of MSME financing products that take care of the funding needs of micro and small entrepreneurs. UCO Bank offers collateral-free loans up to Rs. 200 lakhs for SMEs. Here, in this guide, you can find all that you need to know about MSME loans from UCO Bank – Features, Eligibility Requirements, Benefits, FAQs and more.

About UCO Bank

With a wide range of products that appeal to all categories of customers, UCO Bank is one of the most trusted banks in India. Founded in 1943, UCO bank is one of the premier banks in India with a renowned board of directors, which includes eminent professionals like economists, top-notch businessmen, management experts, Reserve Bank of India and the Government of India representatives.

Headquartered in Kolkata, UCO Bank has 42 zonal offices and 3000 service units spread all across the country. Not just in India, UCO Bank also has two international financial centres in Singapore and Hong Kong.

Nation-wide presence, profitable overseas operations, a high proportion of long-term liabilities, strong capital base, CBS at all branches, large and diversified client base, well-diversified asset portfolio are some of the strengths of UCO Bank.

List of MSME Products from UCO Bank

1. Scheme for Financing Two Wheelers Under MUDRA

Objective: This product aims to finance two wheelers purchased by MSME enterprises under the Mudra scheme.

Borrower Type: Non-salaried individuals. This loan facility is available in all branches of UCO bank.

Nature of Loan: Term Loan

Loan Limits: There are no minimum borrowing requirements. The maximum loan limit available under this scheme is Rs. 1 lakhs. Depending on the amount borrowed, the loan can be classified into:

  • Shishu – Loans up to Rs. 50,000
  • Kishore – Loans more than Rs. 50,000 and less than Rs. 1 lakh

Rate of Interest: MCLR for 1 year + 0.15%. Note that MCLR rates are subject to revisal from time to time.

Repayment Tenure: The loan must be repaid in full within a maximum period of 60 months, starting one month after the disbursement of the loan amount.

Collateral Security: No collateral or third-party guarantee required.

Documents Required: Apart from the regular KYC documents, borrowers have to submit RTO vehicle transfer forms as well as RC of the vehicle.

2. E-Rickshaw Under Mudra Scheme

Objective: This loan product aims to increase the confidence of enterprising young individuals to become first-generation entrepreneurs. This loan also helps MSMEs extend their business operations by purchasing an e-Rickshaw.

Borrower Type: Non-salaried individuals. This loan facility is available in all branches of UCO bank.

Nature of Loan: Term loan only.

Loan Limits: No minimum limits.

Rate of Interest: MCLR for 1 year + 0.15%. Note that MCLR rates are subject to revisal from time to time.

Repayment Tenure: The loan has to be repaid within 60 to 84 months, with a moratorium period of 3 months.

Collateral Security: No collateral or third-party guarantee required.

Other Terms and Conditions: The branch where you apply for the loan checks whether the e-Rickshaw has the necessary permits and clearance from the local authorities. Additionally, the branch checks whether the e-Rickshaw is registered with the state or local government authorities.

3. Pradhan Mantri MUDRA Yojana (PMMY)

The PMMY (Pradhan Mantri MUDRA Yojana) is a loan scheme introduced by the central government of India on 8th April 2015. Under this scheme, non-farm micro and small enterprises can avail loans up to Rs. 10 lakhs. All public sector banks (PSBs), private banks, regional rural banks, co-operative banks, foreign banks and NBFCs are required to lend PMMY loans to applicable borrowers.

Objective: UCO bank offers PMMY loans to aspiring dynamic individuals to help them become first-generation entrepreneurs. Additionally, existing MSMEs can avail loans under this scheme to expand their business operations.

Borrower Type: Entrepreneurs and MSMEs including individuals, sole-proprietorships, partnership firms, private limited companies and public limited companies.

Nature of Loan: Term Loan. Depending on the amount borrowed PMMY loans are classified as follows:

  • Shishu – For loans up to Rs. 50,000
  • Kishor – For loans above Rs. 50,000 and lesser than Rs. 5 lakhs
  • Tarun – For loans above Rs. 5 lakhs and lesser than Rs. 10 lakhs

Loan Limits: This loan has no minimum borrowing limit. The maximum borrowing limit is Rs. 10 lakhs.

Rate of Interest: MCLR for 1 year + 0.15%. Note that MCLR rates are subject to revisal from time to time.

Collateral Security: No collateral or third-party guarantee required.

4. STANDUP India

Objective: This is a special financing scheme for women entrepreneurs and SC/ST entrepreneurs. This loan aims to provide bank loans for women and people belonging to SC/ST categories to set up a new Greenfield project. The project can be either in the manufacturing, trading or services sector. As per the requirements of the central government of India, all banks have to offer a minimum of one STANDUP India loan at every branch.

Borrower Type: Women entrepreneurs or entrepreneurs belonging to SC/ST for setting up a Greenfield project.

Nature of Loan: Composite loan (which is inclusive of both working capital and term loan)

Loan Limits: The minimum loan amount under this scheme is Rs. 10 lakhs and the maximum loan amount available is Rs. 1 crore.

Rate of Interest: The rate of interest varies depending on the borrower’s financials. It should not exceed MCLR + 3% of the tenure premium.

Repayment Tenure: Loans should be repaid within a maximum period of 7 years.

5. Swaraojgar Credit Card

Objective: SCC (Swaraojgar Credit Card) scheme helps in providing timely working capital to small artisans, fishermen, handloom weavers, rickshaw drivers, self-employed individuals in the service sector, and other micro-entrepreneurs.

Borrower Type: Apart from the borrowers listed above, the SCC scheme is also applicable to borrowers in urban areas, provided they own a small business that is covered under the priority sector.

Nature of Loan: A credit facility is extended. This credit facility is a composite loan, which includes both term loan and/or cash credit.

  • The term loan is provided for investment requirements and has to be repaid within five years of loan disbursement in regular instalments.
  • The cash credit is fixed based on the operating cycle of the business and is determined based on the available balance after the term loan has been sanctioned.

Loan Limits: Rs. 25,000 per borrower as a composite loan.

Rate of Interest: MCLR for 1 year + 1.15%. Note that MCLR rates are subject to revisal from time to time.

Repayment Tenure: The validity of this scheme is a maximum of five years.

Collateral Security: It depends on the bank’s norms. Contact your nearest UCO bank branch to find out whether you have to submit collateral.

Terms and Conditions: UCO Bank of India has the complete freedom to decide who is eligible for the SCC scheme. There are no subsidies from the government. The borrower is free to choose the credit facility as per his/her requirements. He/she can opt for a term loan, a working capital loan or a composite loan that is a combination of both.

6. Laghu Udyami Credit Card

Objective: The Laghu Udyami credit card is offered to retail traders, small business units, cottage industries, tiny sector units, artisans and self-employed professionals.

Eligibility: Existing micro and small entrepreneurs who are customers of UCO bank for a minimum of three years are eligible for this loan.

Loan Limits: Maximum of Rs. 10 lakhs per borrower

Rate of Interest: MCLR for 1 year + 1.15%. Note that MCLR rates are subject to revisal from time to time.

Repayment Tenure: The credit facility under the LUCC scheme is valid for a maximum of 3 years. However, it can be extended on review.

Collateral Security: The existing securities of MSME with the bank are passed to the LUCC account while availing the LUCC account. However, for entrepreneurs who have an excellent track record, the bank may waive off the requirement for submitting collateral.

7. UCO Trader

Objective: This MSME loan aims to provide working capital and term loan requirements of borrowers engaged in retail and wholesale trading activities. This loan is also available to entrepreneurs in the service sector who are willing to mortgage property or other security.

Borrower Type: Individual entrepreneurs, sole proprietorship concerns, Hindu Undivided Family, Limited Company – Public and private.

Nature of Loan: Fund-based and non-fund based.

Loan Limits: The amount you can borrow under this scheme ranges from Rs. 1 lakh to Rs. 500 lakhs (5 crores).

Rate of Interest:

  • For loans up to Rs. 1 crore, the interest rate is MCLR for 1 year + 1.15%. Note that MCLR rates are subject to revisal from time to time.
  • For loans more than Rs. 1 crore, the interest rate depends on the rating of the company.

Collateral Security: Tangible collateral securities like non-agricultural land, building or other properties.

8. UCO Udyog Bandhu

Objective: UCO Udyog Bandhu extends credit limit to MSMEs engaged in production, manufacturing, processing and other service-related activities.

Eligibility Criteria: This loan product is available to technically qualified and experienced entrepreneurs who own and operate a micro or small enterprise under the MSMED Act of 2006.

Nature of Loan: Term loan, composite loan, cash credit or bank guarantee limit.

Loan Limits: The available loan limit varies from Rs. 1 lakh to Rs. 7.5 crores based on the eligibility of the borrower.

Rate of Interest: The rate of interest depends on the borrowed loan amount:

Loan AmountInterest Rate
Up to Rs. 10 lakhsMCLR of 1 year + 0.15%
Rs. 10 lakhs to Rs. 1 croreMCLR of 1 year + 1.15%
Above Rs. 1 croreAs per internal rating

10. UCO Roop Sangam

Objective: This is an MSME loan from UCO bank offered to encourage and empower upcoming women entrepreneurs.

Eligibility Criteria:

  • Solo Women entrepreneurs or a unit set up by a group of women. If the group is a partnership firm, the majority of stakeholders should be women.
  • The age limit of the applicant should be between 20 and 60 years.
  • The borrower should have adequate experience in her line of business

Nature of Loan: Term loan or working capital loan as per the requirements of the borrower

Loan Limits: Maximum available loan amount – Rs. 10 lakhs (out of which working capital loan should not exceed Rs. 3 lakhs)

Rate of Interest: MCLR for 1 year + 0.15%. Note that MCLR rates are subject to revisal from time to time

11. Artisans Credit Card

Objective: The Artisans Credit Card is a type of MSME loan offered to artisans to provide them with timelyworking capital

Borrower Type: This loan is available for artisans who are involved in handicraft manufacturing and production. Preference is given to artisans who are registered with the Development Commissioner of Handicrafts.

Nature of Loan: Term loan or cash credits as per the requirements of the borrower.

Loan Limits: The maximum available loan amount under this scheme is Rs. 2 lakhs.

Rate of Interest: MCLR for 1 year + 1.15%. Note that MCLR rates are subject to revisal from time to time.

Collateral Security: No collateral or third-party guarantee required.

12. Prime Minister’s Employment Generation Programme (PMEGP)

Objective: This loan product aims to generate employment opportunities in rural and urban areas by providing the capital to set up new self-employment projects and micro-enterprises.

Eligibility: This loan amount is available to all individuals over the age of 18 years (income is not a consideration), having passed at least class VIII (or equivalent). The beneficiaries for this scheme are selected at the district level by a task force set up by the local government.

Loan Limits: The maximum loan amounts for:

  • Business or service sector – Rs. 10 lakhs
  • Manufacturing sector – Rs. 25 lakhs

Rate of Interest: MCLR for 1 year + 1.15%. Note that MCLR rates are subject to revisal from time to time.

13. UCO Doctor Scheme (Revised)

Objective: The UCO Doctor Scheme helps doctors and medical centre owners to avail loans for the purchase of medical equipment, or for the addition, construction, renovation and furnishing of medical centres, nursing homes and clinics.

Nature of Loan: Cash credit or term loan as per requirements

Eligibility: This loan is available to:

  • Individuals, partnership firms, sole-proprietorships, private limited companies that are engaged in medical services, diagnostic services, pathological services and other related medical services.
  • Doctors applying for this loan must have been practicing for a minimum of three years.
  • In the case of a medical centre, the centre must have been in operation for at least three years and generating profit.

Loan Limits: The available loan amount ranges from a minimum of Rs. 1 lakh to a maximum of Rs. 3 crores.

Rate of Interest: The rate of interest depends on the borrowed loan amount:

Loan AmountInterest Rate
Up to Rs. 25 lakhsMCLR of 1 year + 1.15%
Rs. 25 lakhs to Rs. 1 croreMCLR of 1 year + 2.15%
Above Rs. 1 croreAs per internal rating

*Note that MCLR rates are subject to revision from time to time.

Collateral Security: For loans up to Rs. 2 crores, there is no need of any collateral security or guarantee.

How to apply for MSME Loans from UCO Bank?

UCO Bank provides borrowers with an online application form that makes applying for MSME loans hassle-free. Borrowers can use the online application portal to submit details of their loan requirements as well as to provide details about their business, etc. Once you submit all the details, you are provided with a reference number and representatives from UCO bank will get in touch with you to discuss your loan requirements with you.

Alternatively, borrowers can also visit any nearest UCO bank branch to submit their loan applications in person.

Documentation Required for MSME Loan from Union Bank of India

While applying for an MSME loan from UCO Bank, the borrower has to provide KYC details of self as well as the enterprise. Here are some of the documents that you are required to submit:

  • KYC details like address proof, identity proof
  • Proof of registration of business – Pan card, GST registration, partnership deed, etc.
  • Duly filled-in application form

Apart from these basic documents, the borrower may be required to submit additional proof as and when required.

UCO Bank FAQs

1. Does UCO bank have any specialized branches to handle MSME loans?

Yes. UCO Bank has a list of specialized branches to deal with MSME loans and other related financing products for small businesses. You can find the list of MSME branches on the website. Additionally, UCO bank offers twelve specialised hubs to deal with SME products. These hubs are spread throughout the country and are located in the following cities:

  • Chennai, Hyderabad, Bengaluru, Ahmedabad, Bhubaneswar, Mumbai, Kolkata, Chandigarh, Jaipur, Nagpur, Raipur and New Delhi.

2. What is the moratorium period?

The moratorium period refers to the loan period where the borrower does not have to make any loan repayments. Simply put the loan EMIs start after the completion of the moratorium period.

3. I am an exporter. Am I eligible for an MSME loan under UCO Trader?

No. The UCO trader loan product is only for retail and wholesale domestic traders. Get in touch with UCO bank to find the right MSME loan product that suits your needs.

4. Do women entrepreneurs enjoy discounts on interest rates of MSME loans from UCO Bank?

Yes. Women entrepreneurs who avail loans under Udyog Bandhu can enjoy discounted interest rates that are 0.50% lesser than the effective rate of interest.

5. I am a veterinary doctor. Can I avail loans using the UCO Doctors MSME loan scheme?

No. The UCO Doctors (Revised) loan scheme is only available to allopathic doctors and medical centre owners.

6. How do I know if my business is a micro, small or medium enterprise?

According to the MSMED (Micro, Small and Medium Enterprises Development) Act of 2006, MSMEs are classified based on the investment in machinery and plant (for manufacturing companies) and investment in equipment (for service enterprises).

ClassificationManufacturing EnterprisesService Enterprises
MicroInvestment up to Rs. 25 lakhsInvestment up to Rs. 10 lakhs
SmallInvestment between Rs. 25 lakhs and up to Rs. 5 croresInvestment between Rs. 10 lakhs and up to Rs. 2 crores
MediumInvestment between Rs. 5 crores and up to Rs. 10 croresInvestment between Rs. 2 crores and up to Rs. 5 crores

7. What MSMEs are considered as manufacturing enterprises?

If you own a business that is involved in manufacturing, production, processing or preservation of goods, then your business is classified as a manufacturing enterprise under the MSMED Act of 2006. Here are a few examples of manufacturing enterprises:

  • Printing, publishing
  • Manufacture of medical equipment or Ayurvedic products
  • Piggy farms and bacon processing
  • Cigarette, beedi or other tobacco manufacturing products
  • Manufacture of bio fertilisers
  • Extraction of agave spirit from agave plants
  • Electricity generation via windmills
  • Seed processing
  • And more

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