Micro, Small, and Medium-Sized Enterprises (MSMEs) play a vital role in the creation of jobs and GDP expansion in India. However, one of the biggest issues facing MSMEs in the nation is a lack of access to financing. Numerous state and federal governments have introduced lending programs for MSMEs in order to address this problem. We’ll examine a few of the lending programs for MSMEs in Tamil Nadu in this blog.

Annal Ambedkar Business Champions Scheme

In Tamil Nadu, the Annal Ambedkar Business Champions Scheme (AABCS) is a dedicated MSME financing program designed to support the economic advancement of business owners who identify as Scheduled Castes (SCs) or Scheduled Tribes (STs). Some of its characteristics are as follows:

New Entrepreneur cum Enterprise Development Scheme

The Government of Tamil Nadu’s Department of Micro, Small and Medium Enterprises (MSME) launched the New Entrepreneur-cum-Enterprise Development Scheme (NEEDS). Promoting first-generation entrepreneurs’ entrepreneurial endeavors is the scheme’s primary goal. Among its attributes are the following:

Tamil Nadu State Government Credit Guarantee Scheme

In order to give MSMEs credit guarantees for loans obtained from banks and other financial institutions, the Tamil Nadu government launched the Tamil Nadu State Government Credit Guarantee Scheme. The scheme is implemented by Tamil Nadu Industrial Investment Corporation (TIIC). This plan includes working capital facilities as well as term loans. Some of its characteristics are as follows:

The Tamilnadu Industrial Investment Corporation Ltd Loans

MSMEs can apply for loans from the Tamil Nadu Industrial Investment Corporation (TIIC) to start new projects or grow current ones. This programme provides loans and subsidies all under one roof. Here are a few of its characteristics:

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:

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:

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:

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: