Leading the way in the nation’s promotion of MSMEs is Karnataka. It is one of India’s most industrially developed states, with a major emphasis on the growth of the MSME sector. In an effort to promote entrepreneurship, the Karnataka government has launched a number of MSMEs credit programs. These programs give MSMEs the money they need to launch, grow, or modernize their enterprises. We’ll talk about a few of the Karnataka MSMEs loan programs in this blog.

Karnataka State Financial Corporation (KSFC)

MSMEs can receive financial support from KSFC through a number of loan programs. They provide working capital loans, term loans, and loans for starting new enterprises or growing current ones. All types of entrepreneurs, including women, SC/ST, and minorities, are eligible for the program. Here are a few of its highlights:

• Loan amount: Up to 8 crore
• Collateral Required
• Loan tenure: 3-8 years
• Processing fee: 0.50%+ Service Tax
• Promoters Contribution: Between 10% and 22.5%

Karnataka Small Scale Industries Development Corporation (KSSIDC) Loan Scheme:

MSMEs can apply for loans from the Karnataka Small Scale Industries Development Corporation (KSSIDC) to finance the start-up, growth, and modernization of their enterprises. Women entrepreneurs and other qualifying MSMEs in Karnataka are welcome to participate in the program. These are its principal points of interest:

• Loan amount: 5 lakh to 5 crore
• Interest rates: 9.5% to 11.5%
• Loan tenure: Up to 7 years
• Age: Minimum age of 18
• Promoters Contribution: Between 15% and 25% of the project cost

Shramashakthi scheme MSME loan Karnataka

The Karnataka Minorities Development Corporation introduced the Shramashakthi MSME financing program on behalf of the state government of Karnataka. This program was designed to provide financial and training support to the state’s religious minority. Here are a few of its highlights:

• Loan amount: Up to 50,000
• Interest rates: 4%
• Loan tenure: 36 months
• Residency: Permanent resident of Karnataka
• Age: Between 18 and 55 years of age

Credit Linked Capital Subsidy Scheme (CLCSS)

October 2000 saw the introduction of the Credit Linked Capital Subsidy Scheme by the Indian government. This program gives MSMEs the money they need to upgrade their current technology. Businesses can improve their current equipment and plant with this strategy, which will boost revenue. Although there is no maximum loan amount for this plan, the subsidy is only based on the loan amount approved for P&M purchases. Its primary characteristics are as follows:

• Loan amount: No upper limit
• Subsidy: 15% of the loan amount
• Annual guarantee charge: 0.75%-1.0%
• Loan tenure: Flexible tenure depending upon the repayment capacity

Pradhan Mantri MUDRA Yojana (PMMY)

Launched in 2015, the Pradhan Mantri MUDRA Yojana (PMMY) is a prominent central government program. It offers microloans to small, non-farm, non-corporate businesses in both rural and urban locations.

Depending on the phases of a company’s growth and its finance requirements, PMMY offers loans in three categories:

• 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 number of financial organizations, such as Non-Banking Financial Companies (NBFCs), Small Finance Banks, Regional Rural Banks, Public and Private Sector Banks, and Microfinance organizations.

PMMY does not have any restrictions on age, gender, tenure, interest rates, or other factors that other loan programs do. Depending on the loan type and the lending institution’s policies, each of these elements may change.

Prime Minister’s Employment Generation Programme (PMEGP)

Aiming to create jobs through the establishment of micro-enterprises, the Ministry of Micro, Small, and Medium Enterprises (MSME) oversees the PMEGP, a credit-linked subsidy program. This program’s primary beneficiaries are women, aspiring and established craftspeople, and young people without jobs. Some of its primary characteristics are as follows:

• Age: Minimum age of 18
• Interest rate: Between 11% -12% depending 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 Ministry of Micro, Small, and Medium Enterprises (MSME), the Government of India, and the Small Industries Development Bank of India (SIDBI) jointly established the CGTMSE project in 2000. It pushes financial institutions to grant micro and small businesses credit plans without collateral. The bank has the right to make a claim with CGTMSE in the event of a default. Some of its primary characteristics are as follows:

• Loan amount: Up to 5 crore
• Collateral: Not required
• Loan tenure: 5-10 years
• Annual Guarantee fee: 0.37%-1.35%
• Age: Minimum age of 18

Stand-up India

Get up India is a 2016-launched central government initiative. It offers women and members of Scheduled Castes (SCs) and Scheduled Tribes (STs) bank loans to pursue business. This scheme does not allow loans to existing firms; instead, it only provides funds to launch new businesses. Regional rural banks (RRBs), small financing banks, and scheduled commercial banks are some of the banks that offer these loans.

Loan amounts under this scheme range from Rs. 10 lakhs to Rs. 1 crore. Interest rates and terms are subject to change based on a number of criteria, including the type of business, the lender’s credit policies, and other variables.

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

Under the “Made in India” campaign, the central government developed the SMILE program, which offers financial support to 25 identified sectors. This program encourages entrepreneurs to support the “Make in India” agenda. SMILE offers sufficient money for both the establishment of new businesses and the growth of already-existing ones. Some of its primary characteristics are as follows:

• Loan tenure: Maximum 10 years
• Loan amount: From Rs.10 lakhs to Rs.25 lakhs
• Interest rates: Depending on enterprises’ requirement
• Nature of loan: Quasi-equity and term loans