Micro, Small, and Medium Enterprises (MSMEs) form the backbone of India’s economy, providing employment opportunities to millions of people. Punjab, one of the most prosperous states in India, has a vibrant MSME sector that contributes significantly to the state’s economic growth. However, the growth of MSMEs is often hindered by the lack of access to adequate financial resources. To address this issue, state and central governments have launched various loan schemes to provide financial assistance to MSMEs in Punjab. In this blog, we will discuss some of the loan schemes available in Punjab specifically for women and SC/STs and their eligibility criteria.
Punjab National Bank (PNB) MSME Loan Scheme
PNB offers financial assistance to MSMEs for various purposes such as the purchase of machinery, working capital, infrastructure development, and technology up-gradation. These schemes cover various aspects of business operations, from starting up to expansion and modernization. Following are some of its main highlights:
| Loan amount | Upto 5 crore |
|---|---|
| Repayment Period | Varies depending on the loan amount and the type of loan. Generally ranges between 3 to 7 Years. |
| Interest rates | 8.50% to 13.50% |
| Age | Minimum 18 years of age |
| Gender | Male/Female |
Punjab State Cooperative Bank (PSCB) MSME Loan Scheme
PSCB provides financial assistance to MSMEs for various purposes such as working capital, purchase of machinery, and infrastructure development. Like PNB, Punjab State Cooperative Bank (PSCB) also provides schemes that cover various aspects of business operations, from starting up to expansion and modernization. Following are some of its main highlights:
| Loan amount | Upto 5 crore |
|---|---|
| Repayment Period | Varies depending on the loan amount and the type of loan. Generally Upto 7 years |
| Interest rates | 7% – 12% |
| Age | Minimum 18 years of age |
| Gender | Male/Female |
Mahila Udyam Nidhi Scheme
The Mahila Udyam Nidhi Scheme provides financial assistance to women entrepreneurs who want to start new ventures or expand their existing businesses. The main motive of the scheme is to empower women entrepreneurs across the state. Please note that these schemes are now available only through Punjab National Bank. The following are some of its features:
| Loan amount | Up to Rs. 10 lakh |
|---|---|
| Loan interest | 5% per annum |
| Loan tenure | 5 to 7 years |
| Educational Qualification | 10th standard |
| Age & Gender | Women aged 18 to 55 years |
Punjab State Scheduled Caste Land Development and Finance Corporation (PSSCLDFC) MSME Loan Scheme
The Punjab State Scheduled Caste Land Development and Finance Corporation (PSSCLDFC) offers various loan schemes to support Scheduled Caste individuals in Punjab for diverse economic activities. It provides financial assistance to SC entrepreneurs for the establishment of new enterprises or for the expansion of existing ones. Following are some of its main highlights:
| Loan amount | Up to Rs. 30 lakh |
|---|---|
| Loan interest | 5% – 8% |
| Loan tenure | 3 to 15 years |
| Age | 18 to 55 years |
| Category | SC |
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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