The MSME sector is crucial to Gujarat’s economic development, providing major employment, income growth, and general economic prosperity. To support and promote the growth of MSMEs in the state, the Gujarat government has implemented a variety of MSME loan schemes that provide financial help to MSMEs at various phases of their company lifecycle. MSMEs frequently encounter a number of problems, including limited access to capital, inadequate infrastructure, and regulatory barriers.

These loan schemes provide financial help to MSMEs at various stages of their business lifecycle, from starting a new business to growing an established one. MSMEs can use these credit schemes to get the financing they need to buy machinery and equipment, hire skilled workers, enhance their infrastructure, and grow their operations. The following are the top MSME loan packages accessible in Gujarat.

Gujarat Industrial Investment Corporation’s (GIIC) MSME Loan Scheme

The Gujarat Industrial Investment Corporation (GIIC) Loan Scheme is a financial assistance program provided by the GIIC to help create and grow Micro, Small, and Medium Enterprises (MSMEs) in the state of Gujarat. It offers term loans at affordable interest rates to MSMEs across the state, not just in GIDC industrial complexes, to help them start new businesses or grow their existing ones. Here are some of the highlights:

• Loan amount: Up to 50 crore.
• Interest rates ranged from 9.75% to 12.25%.
• Loan tenure Up to ten years.
• Collateral required Age Minimum age is 18.

Credit-Linked Capital Subsidy Scheme (CLCSS)

In October 2000, the Government of India established the Credit Linked Capital Subsidy Scheme. This plan offers MSMEs with the necessary financing to upgrade their present technologies. Businesses can utilize this initiative to improve their existing plant and machinery and increase profits. This policy has no upper loan limit, however the subsidy is based solely on the loan amount sanctioned for P&M purchases. It has the following primary features:

• Loan amount: no upper limit.
• Subsidy: 15% of loan amount.
• Annual guarantee fee: 0.75-1.0%.
• Loan tenure: Flexible tenure based on the repayment capacity

Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri Mudra Yojana (PMMY) is a major central government plan that debuted in 2015. It makes microloans to non-corporate, non-farm micro, and small businesses in both rural and urban locations.

PMMY provides loans in three categories, based on the stage of business growth and finance requirements:

• Shishu Mudra: Up to Rs 50,000.
• Kishore Mudra: Rs. 50,001 to Rs. 5 lakh
• Tarun Mudra: Rs 5 lakh to Rs 10 lakh.

MUDRA loans are available through a variety of financial institutions, including public and private sector banks, regional rural banks, small finance banks, microfinance institutions, and non-banking financial companies (NBFCs).

Unlike other loan schemes, PMMY has no age, gender, duration, or interest rate requirements. All of these elements can vary depending on the loan category and the lending institution’s policies.

PM’s Employment Generation Programme (PMEGP)

PMEGP is a credit-linked subsidy system operated by the Ministry of Micro, Small, and Medium Enterprises (MSME) that intends to provide job possibilities through the establishment of micro-enterprises. The primary beneficiaries of this initiative are women, traditional and potential craftspeople, and unemployed youngsters. Here are some of its primary features:

• Age: Minimum age of 18.
• Interest rates vary between 11% and 12% based on the bank.
• Loan tenure: 3-7 years.
• Education qualification: VIII standard pass.
• Maximum loan amount: Rs. 1 Crore.
• Subsidy: 15% to 35%.

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

The CGTMSE is a cooperative project initiated in 2000 by the Ministry of Micro, Small and Medium Enterprises (MSME), the Government of India, and the Small Industries Development Bank of India (SIDBI). It promotes financial institutions to offer collateral-free credit solutions to micro and small businesses. In the event of a default, the bank might submit a claim with CGTMSE. Here are some of its primary features:

• Loan amount: Up to 5 crore.
• Collateral is not required.
• Loan tenure: 5-10 years.
• Annual Guarantee Fee: 0.37%-1.35%.
• Age: Minimum age is 18.

Stand Up India

Stand-up India is a central government project that began in 2016. It offers bank loans to women and Scheduled Castes (SCs) and Scheduled Tribes (STs) to start their own businesses. Existing firms are ineligible for loans under this scheme because they are intended for new businesses only. These loans are supplied by a variety of banks, including scheduled commercial banks, regional rural banks (RRBs), and small financing banks.

This scheme offers loans ranging from Rs 10 lakhs to Rs 1 crore. Interest rates and tenure vary depending on the type of the firm, as well as other considerations such as the lender’s credit policies.

SIDBI Make-in-India Soft Loan Fund for Micro, Small, and Medium Enterprises (SMILE)

The national government established SMILE, a project to provide financial help to 25 identified sectors as part of the ‘Make in India’ strategy. This project encourages the ‘Make in India’ concept among entrepreneurs. SMILE provides ample finance for both the establishment of new firms and the expansion of existing ones. Here are some of its primary features:

• Maximum loan tenure: 10 years.
• Loan amount ranges from Rs.10 lakh to Rs.25 lakhs.
• Interest rates vary based on corporate requirements.
• Nature of the loan: Term and quasi-equity loans