The MSME is a crucial sector in the Indian economy. However, micro, small and medium enterprises need funds to set up or grow. Thankfully, the Indian government and the banking sector understand the essence of MSME credit and have come forward through various schemes to grant loans to the sector. After the impact of Covid-19, the role of the banking sector has increased even more than before. Some of the loan schemes that various banking players offer are:
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MUDRA (Micro Units Development and Refinance Agency Limited) is an NBFC
offering a loan to non-corporate and non-farm enterprises in the sector. Under
the Pradhan Mantri Mudra Yojana, there are three schemes – Shishu, Kishor, and
Tarun to micro-units.
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The Khadi and Village Industries Commission (KVIC) offers support in
self-employment opportunities to artisans in the non-farm sector through the
PM’s Employment Generation Programme (PMEGP).
- The Ministry of Finance established the Small Industries Development
Bank of India (SIDBI) to offer financial support to the MSME sector in 1990. The
Reserve Bank of India regulates its work.
- Yes MSME is a program launched by Yes Bank to offer loans to the sector.
Besides, the program also offers operational and financial solutions with the
help of specialists like Clear Tax and ZOHO to MSMEs.
- The Ministry of MSME and SIDBI set up a Credit Guarantee Trust Fund for
MSMEs to implement a credit guarantee scheme for the sector. The scheme offers
loans to the sector without any 3rd party collaterals.
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Twelve state-owned banks like SIDBI, SBI, PNB, BoB, BOI, NABARD,
TIIC, SBBJ, Corporation Bank, Indian
Bank, and Canara Bank offer subsidies to the MSME sector technology upgradation
under the Credit Linked Capital Subsidy (CLCSS) scheme.
Besides the above
schemes, different banks offer loans to MSME units without collaterals. Mr.Rohit Kakkar, MD of VSRC Agro Products, has played a crucial role in
highlighting issues being faced by the sector during the pandemic and now after
the lockdown has been lifted. He feels that the banking sector can do a lot
more to support MSMEs during these challenging times.
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