Home Business & Management Government Scheme For Business Loan

Government Scheme For Business Loan

On 8 April 2015, the Government of India announced the launch of Mudra loan saying that it will benefit entrepreneurs by expanding their existing business or by starting a new business. It announces 3 government scheme under the Mudra loan.

SCHEMELOAN UPTO
Shishu50000 RS
Kishore yojna50000 to 500000
Tarun Yojna10 Lakh

This scheme does not provide loan more than 10 lakh

What’s in it for me ?

  1. Benefits of Mudra loan
  2. Micro small and medium enterprises
  3. Credit guarantee for micro Enterprise (CGTMSE)
  4. Conclusion
  5. Faq


Benefits of mudra loan

No requirement of collateral

Hence we do not need to keep anything under guarantee and also no statement is required

Focus on unorganized sector

The unorganized sector contributes more than 50% to GDP, hence government decided to provide Mudra loans to this sector so that more employment can also be created and therefore the gap between demand and supply of jobs in India can be narrowed.

But the scheme of mudra loan seemed to be failing when some of the genuinely needy people did not get the loan. Hence the government started to pressurize the bank to provide loans to a particular number of people for a particular reason.

But this also could not be careful because the managers started to provide loan to known disputed people for some money and also public started to use it in the wrong way.

Hence the non-performing Assets of the bank started increasing actually, the Mudra loan was a priority made for Women entrepreneurs but could not succeed due to the group of people.

For example, the MP of PNB was loan 20% and the same happened other with other public sector banks also.

RBI former governor Mr. Raghu ram Rajan started that there were around 2313 fraud cases is the current Governor of RBI directed the bank to provide Mudra loan only after full verification


Goal of mudra loan

the basic goal of the Mudra loan was to create employment, thereby increasing GDP and per capita income of the country. Under this seen around 19 crore loan was provided there a total of 5 lakh crore amount was given as loan creating around 60 lakh jobs but the performance does not seem to be satisfactory.

Hence the goal of Mudra loan scheme seems to be failing economist suggesting the government to redesign the scheme benefit both public and Bank

Mudra loan eligibility creteria
Steps to apply for mudra loan

Also read – Angel investor


MSME


MSME stands for Micro Small And Medium Enterprises. It is a branch of the Indian government that was established on 16 June 2006. It aimed to help small micro and medium scale businessman because, in our GDP, the growth of the country depends on these classes up to a great extent.

There are around 12.5 million MSME in our country that provides employment to around 30 million people. They contribute approximately 50% of the industrial population and approximately 45% of export.

government scheme


Categorization

Government of India key tried MSME into two field

  • Manufacturing sector.
  • Services sector.


These two categories are further classified into Micro small and medium.
The characterization of any business in the categories depends on the investment that is made infrastructure machine equipment etc.

Some of the industries coming under MSME include food processing agriculture chemical and Pharmaceutical etc. There are certain that has been said by the government of India that classify the industries as micro small and medium based on investment oiling for plant machinery and equipment.

Registration process for msme


How to take benefits of MSME government scheme?


In order to be eligible for benefits, one must be registered under the MSME category.


Credit guarantee for micro Enterprise (CGTMSE)

Under this scheme, one can take loan up to rupees 2 crores without any Collateral security, where now a day 75% of guarantees been taken by the government. One only has to put 10% of personal investment. and if both wise banks and investors agree, hi/she can give 15% situated to the bank in any form.


What to do when any micro or small scale investor want to do business with government

CGTMSE


The facility available to all micro and small scale investors allow you to do business with government without any tender fee and earnest money deposition. This facility is available for both manufacturing and service sector but not for trading sector.

Manufacturing sector

The companies with investment up to 25 lacs in plant and machinery come under the micro category but those with investment up to the rupees 5 crore come under the small category.

Service sector

The companies with investment in equipment up to rupees 10 lakh come under the micro category but those with investments up to 2 crores come under the small category.

By doing single point registration one can become eligible to not required to feet under fees again and again and also be prevented from rest money deposition.


There are several organizations of a fee to be paid for this single point registration for turnover up to 1 crore micro Industries have to pay a fee of rupees 3000 and small industries have to pay rupees 5000.


For turnover man than 1 crore then is an additional fee for every 1 crore turnover added in case of both micro and small scale industry. But there is a limit of maximum fee cap for both that is rupees 1 lakh for a huge turnover.

For any new company which has completed its one-year production is eligible for provisional registration with a monetary limit of rupees 5 lakh.

Conclusion

Launching MUDRA Bank is the most welcoming effort taken by the Government of India to fulfill the financial needs of micro-units. It should function effectively furthermore for the said purpose to safeguard the functioning of micro-units. Mudra loan has not benefited mass to the needy people, also the banks. NPA has increased. Hence now certain known has been made. So if you need Mudra loan, it will be fit time taking then it was earlier.

MSMEs can enter into the capital market more seriously. So that sufficient funds can be arranged.

FAQ

Which bank provide mudra loan ?

Union Bank of India.
Tamilnad Mercantile Bank.
Indian Overseas Bank.
South Indian Bank.
Bank of Mahrashtra.
State Bank of Hyderabad.
HDFC Bank.
State Bank of India

Who can get mudra loan ?

Anyone who runs small business enterprise is eligible to apply for mudra loan

Can mudra loan applied online ?

yes,you can apply mudra loan online

Is mudra loan still available ?

yes it is still available

Msme who can register ?

Any type of company can register for MSME.

Hi I’m Gurpreet singh, Engineer turned Digital Marketer | Entrepreneur |Mechanical Engineer|Visit gurpreetchawla.in

Gurpreet Chawla
Hi I’m Gurpreet singh, Engineer turned Digital Marketer | Entrepreneur |Mechanical Engineer|Visit gurpreetchawla.in
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