Nagaland, a state in the northeastern region of India, is home to a vibrant and diverse micro, small, and medium enterprise (MSME) sector. To support the growth and development of this sector, the government of Nagaland has launched several loan schemes specifically designed for MSMEs. These loan schemes offer financial assistance to entrepreneurs and help them start or expand their businesses. In this blog, we will discuss some of the MSME loan schemes available in Nagaland.
Nagaland State Industrial Development Corporation (NSIDC) Term Loan Scheme:
The NSIDC Term Loan Scheme provides financial assistance to new and existing MSMEs for setting up new units, expansion, and modernization of existing units. This loan requires the beneficiary to submit collateral to avail this loan. The following are the major highlights of this scheme:
| Loan amount | Up to ₹50 lakh |
|---|---|
| Collateral | Required |
| Loan tenure | Up to 7 years |
| Annual Guarantee fee | 0.37%-1.35% |
| Age | Minimum age of 18 |
Nagaland State Cooperative Bank (NSCB) MSME Loan Scheme:
The NSCB Loan Scheme provides financial assistance to MSMEs for setting up new units, expansion, and modernization of existing units. To access this loan you need to submit a collateral. The collateral can be land, property or any other assets. Following are some of its highlights:
| Loan amount | ₹5 lakh to ₹50 lakh |
|---|---|
| Collateral | Required |
| Loan tenure | Up to 7 years |
| Moratorium period | 2 years on principal repayment |
| Preference | Units located in industrial estates developed by NIDC |
Nagaland State Rural Livelihoods Mission MSME Loan scheme(NSRLM)
NSRLM aims to improve the livelihoods of rural communities in Nagaland by promoting sustainable livelihoods. Under this scheme, financial assistance is provided to women’s self-help groups (SHGs) for starting small businesses. Following are some of its highlights:
| Loan amount | ₹1 lakh to ₹5 lakh |
|---|---|
| Collateral | Depending on the nature of the loan |
| Loan tenure | 5 years |
| Interest rates | 4% to 7% (subsidized Rates) |
| Preference | Self Help Groups (SHGs) formed and promoted by NSRLM |
PM Formalisation of Micro Food Processing Enterprises Scheme
PM Formalisation of Micro Food Processing Enterprises Scheme is a scheme launched by the central government of India to help existing micro food processing units upgrade and formalize their businesses. This scheme is only available to existing units with annual turn over up to 25 lakhs. Following are some of its highlights:
| Soft Loan amount | Up to ₹2 lakh |
|---|---|
| Subsidy | 70% subsidy on capital expenditure (maximum ₹1 lakh) |
| Loan tenure | 6 months to 3 years |
| Extra benefits | Handholding support, technical assistance, and skill development training |
| Preference | Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), and producer cooperatives |
Credit Linked Capital Subsidy Scheme (CLCSS)
Credit Linked Capital Subsidy Scheme was launched in October 2000 by the Government of India. This scheme provides necessary funds to MSMEs for upgrading their existing technologies. Enterprises can use this scheme to upgrade their existing plant and machinery and increase profit. This scheme has no upper loan limit, but the subsidy is calculated on the loan amount sanctioned for P&M purchase only. The following are its main 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 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.
Prime Minister’s Employment Generation Programme (PMEGP)
PMEGP is a credit-linked subsidy scheme administered by the Ministry of Micro, Small and Medium Enterprises (MSME), which aims at creating job opportunities by establishing micro-enterprises. The main target of this scheme is Women, Traditional and prospective artisans and Unemployed youth. The following are some of its main features:
| 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).
CGTMSE is a joint initiative launched 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 encourages financial institutions to provide collateral-free credit schemes to micro and small enterprises. In case of any default, the bank can file a claim with CGTMSE. The following are some of its main features:
| 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
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.
SIDBI Make in India Soft Loan Fund for Micro, Small, and Medium Enterprises (SMILE)
SMILE is a scheme launched by the central government to provide financial assistance to 25 Identified sectors under the ‘Make in India’ initiative. This scheme promotes the ‘Make in India’ initiative among entrepreneurs. SMILE provides adequate funding for the setting up of new enterprises and also for the expansion of existing ones. The following are some of its main features:
| 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 |
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