Large-scale businesses in India can avail credit from a financial institution and repay the same by following the terms set down by lenders.
However, smaller companies are often unable to bear the interest on such loans, leading to the need for specialised government schemes and subsidies for them.
Thankfully, the current government has come up with several schemes to encourage growth in the MSME sector.
Eligible companies under these schemes can avail MSME loans with ease, without needing to worry about significant interest on the principal outstanding. But before you apply for such a scheme you should understand what is MSME and what are its benefits.
The Incubation Scheme is one of these which primarily funds start-ups that come up with fresh and innovative concepts, designs and ideas.
Although primarily dealing with technological advancements, this scheme represents a critical step to promote MSME growth. Maximum credit on offer is Rs.8 lakh.
Those under this CLCSS scheme can avail business loans at significantly subsidised rates. The borrowed money under CLCSS must be used to upgrade technology for the MSME in question. Subsidies are limited to Rs.15 lakh per applicant.
The Credit Guarantee Scheme offers rehabilitation facilities to MSMEs who fail to repay outstanding credit due to reasons beyond their control. The maximum loan amount under this scheme is Rs.50 lakh.
With these MSME schemes and more, the Government of India is trying to encourage self-employment among its workforce. One should look for additional schemes in the future.