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To help the Ministry of Micro, Small and Medium-sized industries (MSMEs), The National Small Industries Corporation (NSIC) has signed a Memorandum of Understanding with a number of banks in India. This agreement is known as Bank Credit Facilitation Scheme. It provides credit support to various MSMEs, which they require from various Private and National Banks.
National Small Industries Corporation (NSIC) is an ISO 9001-2015 certified Government of India Enterprise. The primary objective of NSIC is to foster the growth of MSMEs by providing support services encompassing Marketing, Technological assistance, Finance and other services. They provide enhanced Government Connectivity services.
The Ministry of Micro, Small and Medium-sized based Enterprises is defined by the number of employees appointed at their firm. These business enterprises are limited in size but outnumber large business enterprises by a huge margin. The MSME sector in India is the second largest, with China being the first. This sector entails more than 6.33 crore business units. From this, 90% of them are Micro Enterprises. This sector employs more than 12 crore Indians across the country.
MSMEs are said to contribute abundantly to India’s growing economy. They have taken over various sectors such as healthcare, telecommunications and electronics. To cater to the growth of MSMEs, financial institutions have come up with several Business Loan Schemes to ensure that these enterprises never fall short of funds. MSMEs are said to be the backbone of the Indian Economy.
Depending on the need of the enterprise, the scheme will offer credit support. The bank already fixes the Term Loan limits. For units requiring Working Capital, the loan is limited up to 5 crores. The requirement of the loan is assessed on the basis of 25% of the projected turnover of the next year. Consequently, for limits above 5 crores, the Maximum Permissible Bank Finance method is used to determine the working capital requirement.
MSMEs can opt for the following types of loans with the aid of NSIC:
Any Micro, Small or Medium business enterprise is eligible to apply for the Credit Facilitation Scheme.
Manufacturing Enterprise | Service Enterprise | |
Micro-Enterprise | The original value of an investment in plant and machinery is up to Rs.25 lakhs. | The original value of an investment in equipment is up to Rs.10 lakhs. |
Small Enterprise | The original value of an investment in plant and machinery is Rs.25-500 lakhs. | The original value of an investment in equipment is Rs.10-200 lakhs. |
Medium Enterprise | The original value of an investment in plant and machinery is Rs.500-1000 lakhs. | The original value of an investment in equipment is Rs.200-500 lakhs. |
Step 1: Visit the official NSIC website
Step 2: Download the application form on the website
Step 3: Fill out the application form by providing the necessary details
Step 4: Submit the completed form along with respective documents
Application website: https://www.nsic.co.in/Schemes/Credit-Facilitation-Through-Bank.aspx
Repayment: 5 to 7 years (11 years in exceptional cases)
MSME enterprises play a major role in the GDP growth of the economy. The scheme’s ultimate objective is to boost the Indian economy by aiding MSMEs. The scheme assures help at reasonable and affordable rates. Procuring loans has been made easy through the Bank Facilitation Scheme, even when MSMEs do not possess the documents required to apply for conventional business loans.
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