As the backbone of the Indian economy, MSMEs (Micro, Small and Medium Enterprises) contribute significantly to the country’s GDP and employment opportunities. However, despite their importance, these businesses often face financial challenges, such as the inability to secure adequate funds due to a lack of collateral or credit history.
To support the growth and development of MSMEs, various state and central government loan schemes have been introduced in India. These schemes offer financial assistance to small business owners, helping them to meet their working capital and investment requirements.
In this blog, we will focus on loan schemes available for MSMEs in Uttar Pradesh. We will provide a detailed description of each scheme, along with its features. The following are some of the best Loan schemes that are available for MSMEs in Uttar Pradesh:
Mukhyamantri Yuva Swarojgar Yojana (MYSY)
This scheme is launched by the government of Uttar Pradesh to promote self-employment opportunities among the educated but unemployed youth within the state. The government also offers a 25% subsidy on the margin money requirement for loans. The following are its main features:
| Loan amount | Upto Rs. 25 lakhs |
|---|---|
| Interest rates | 6% for the first 3 years |
| Subsidy | 25% of margin money |
| Educational Qualification | High school passed |
| Gender | Male/Female |
Mukhya Mantri Gramodyog Rojgar Yojana (MMGRY)
This scheme by the Uttar Pradesh state government aims to promote self-employment opportunities in rural areas by providing financial assistance to set up micro-enterprises in the manufacturing, services, and trade sectors. The main objective of the scheme is to promote village industries such as khadi, pottery, weaving, carpentry, and food processing. 50 per cent of the beneficiaries will be from Scheduled Caste/Tribe/Backward Caste (SC/ST/OBC) youth. The following are its main features:
| Loan amount | Upto Rs.10 Lakhs |
|---|---|
| Interest rates | 7-15% |
| Subsidy | Upto 25% of the project cost |
| Preference | Unemployed youth with technical training from ITI and Polytechnic institutes |
| Age & Gender | Male/Female above the age of 18 |
Mukhya Mantri Mahila Udyam Nidhi Yojana (MMUNY)
This scheme aims to promote entrepreneurship among women by providing financial assistance for setting up small enterprises. The main objective of the scheme is to promote women entrepreneurs. To be eligible for the scheme, the applicant must be a woman and a resident of Uttar Pradesh. The following are some of its features:
| Loan amount | Upto Rs.10 lakhs |
|---|---|
| Interest rates | Between 7-15% |
| Gender | Women |
| Age | 18 to 55 years |
Prime Minister’s Employment Generation Programme (PMEGP)
It is a credit-linked subsidy scheme launched by the Government of India. The main objective of PMEGP is to promote and encourage self-employment ventures in both rural and urban areas. The main focus is given to establishing sustainable employment opportunities through micro-enterprises. Below are some of its important features:
| Loan amount | Up to Rs. 25 lakh |
|---|---|
| Interest rates | Depending upon several factors like, bank, creditworthiness of the borrower, etc |
| Subsidy | 25% to 35% of the project cost |
| Gender | Male/Female |
| Age | 18-40 years |
Pradhan Mantri MUDRA Yojana (PMMY)
The Pradhan Mantri MUDRA Yojana (PMMY) is a flagship central government scheme launched in 2015. It provides micro-loans to non-corporate, non-farm micro and small enterprises in both rural and urban areas.
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 availed through various financial institutions, including Public sector banks, Private sector banks, Regional Rural Banks, Small Finance Banks, Microfinance Institutions, and Non-Banking Financial Companies (NBFCs).
Unlike other loan schemes, PMMY doesn’t have specific criteria for age, gender, tenure, interest rates, etc. All these factors can vary based on the category of the loan and the policies of the lending institution.
Stand-up India
Stand-up India is a central government scheme launched in 2016. It provides bank loans for entrepreneurship among women and members of Scheduled Castes (SCs) and Scheduled Tribes (STs). Existing businesses cannot avail loans through this scheme, as these are provided for starting new businesses. These loans are provided through various banks, including scheduled commercial banks, regional rural banks (RRBs), and small finance banks.
This scheme provides loan amounts ranging from Rs. 10 lakhs to Rs. 1 crore. The interest rates and tenure vary depending on the nature of the business and other factors such as the nature of the business, credit policies of the lender, etc.
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