As per some interesting reports, the number of start-ups have almost multiplied 7X times from 7000 in 2008 to 50,000 in 2018. That’s almost unbelievable! We see a spike in innovative launches in field of artificial intelligence, Fin-tech, food, health and more. Now startups are rage in smaller cities as well, besides the tier 1,2 cities. We often hear about raising capital as seed funding to run the businesses and ideas.
As a part of economic aid, the Government of India initiated a Start-up Campaign with Rs 10,000 crore as start-up funding pool. This surely was a big step towards encouraging entrepreneurship & making a better world of us. Today, we have umpteen number of startup businesses which demand existence & therefore the Government of India has come forward to offer different schemes of business loans for start-ups & cater to their financial requirements. SIDBI is one such example out of different Govt endevours. Small Industries Development Bank of India (SIDBI) provides funds to start-ups and MSMEs directly instead of routing through their banks. The Government subsidy loan is usually offered at lower interest rates compared to private banks by almost 300 points or more.
Here are the top 3 schemes offered by Government of India for start-ups and MSMEs:
Top 3 Government Start up Schemes in India
1#. Stand-up India – Stand-up India is a great initiative to encourage entrepreneurship skills among Scheduled Cast, Scheduled Tribes, women communities and other minorities. The loan amount to be availed falls between Rs 10 lakh to Rs 1 crore under the stand-up scheme.
2#. Pradhan Mantri Mudra Yojana – Under the Pradhan Mantri Mudra Yojna scheme, working capital and term loans are available at disposal for all kinds of manufacturing, trading, services including allied agricultural activities. This scheme was launched in the year 2015 for offering term loans under various categories, namely- Shishu, Kishore, and Tarun in sum total between ranging from Rs 50,000 and Rs 10 lakh.
3#. Bank Credit Facilitation Scheme: National Small Industries Corporation (NSIC) eyes to meet the requirements of MSME Loan units in an easy way. Usually, the loan is offered for a tenure ranging from 5-7 years, but in special, cases it can also be extended till 11 years.
Credit facilitation is offered through many banks, some of which are mentioned below –
IndusInd Bank, Vijaya Bank, Yes Bank, Federal Bank, Kotak Mahindra Bank, HDFC Bank, Corporation Bank, AU Small Finance Bank & Bank of Baroda
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4#. Sustainable Finance Scheme: Here, the funding is available for the businesses working in green energy, renewable energy, technology hardware, and non-renewable energy segments. Headed by SIDBI, this scheme intends to provide support to the value chain of cleaner production/energy efficiency, and sustainable development project.
5#. Credit Guarantee Scheme (CGS): These are suitable for both kinds of businesses – those who are in the initial phases, and also those who require funds to expand their businesses. It includes service and manufacturing sector industries; however educational, institutional, agriculture, and retail trade are excluded from applying for this scheme. Under this scheme, a business loan of up to Rs 2 crore can be raised.
6#. Coir Udyami Yojana: The primary aim of this scheme is to set up coir units across India. This Coir Board heads this scheme, and the fund’s project costs up to Rs 10 Lakh. The rate of interest will be at par with the base rate. The total lending fund should not exceed 25% of the total cost of the project.
7#. National Bank for Agriculture and Rural Development (NABARD): NABARD is focussed on providing refinance to lending institutions in rural areas. The bank aims to provide and regulate other facilities that help to promote and develop agriculture, cottage, small industries, handicrafts, and village industries.
