Small and medium-sized enterprises (SMEs) play an important part in every economy, including India. The sector considerably contributes to the country’s GDP, creates jobs, and promotes the growth of other industries. Despite the MSME sector’s promise, many entrepreneurs and small business owners continue to face major financial challenges. To address this issue, several state governments have implemented financing schemes specifically tailored to help MSMEs in their respective states.

This blog will focus on MSME loans in Meghalaya. We will present a full review of the various lending schemes available, including eligibility requirements and application procedures.

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 the loan amount
• Annual guarantee fee: 0.75%-1.0%
• Loan tenure: Flexible tenure depending upon 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 offers loans under three categories, depending on the stages of business growth and funding needs:

• 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.

Prime Minister’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.

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 Loan and quasi-equity loans