Telangana, one of the youngest states in India, has been a leading destination for MSMEs due to its business-friendly policies and conducive environment. MSMEs have been playing a significant role in the state’s economic development, contributing to its growth and providing employment opportunities. However, like any other sector, MSMEs face their fair share of challenges, including access to finance. To address this issue, the Government of Telangana has launched various MSME loan schemes and financial assistance programs to provide support to the MSME sector. These schemes aim to encourage entrepreneurship, promote industrial growth, and provide easy access to finance for MSMEs. This blog will discuss the various MSME loan schemes available in Telangana and how they can benefit from them.


TS-PRIDE (Telangana State Program for Rapid Incubation of Dalit Entrepreneurs) is an initiative by the Telangana government to promote entrepreneurship among Dalits in the state. The schemes offer financial assistance and incentives to encourage business development and empower these communities. Through this scheme, land will be allotted to SC / ST Entrepreneurs in proportion to their population in the State. The following are some of its benefits:

Loan amount Rs.10 Lakhs – Rs.50 Lakhs
Subsidy on investments 15% to 35% depending on the nature of the business
Interest rates 3%-9%
Category SC/ST
Gender Male/Female

Telangana State Minorities Finance Corporation (TSMFC) Bank Linked Subsidy Scheme

The Telangana State Minorities Finance Corporation (TSMFC) Bank Linked Subsidy Scheme provides concessional Subsidized Loans with Bank Linkage for Minorities in the state for the establishment and expansion of MSMEs. This scheme is one of the best MSME loan scheme provided by the Telangana government for the minority community. The financial assistance from the TSMFC by way of subsidy would be linked to the credit component of Banks. Following are some of its benefits:

Subsidy 80% maximum of Rs.80,000/-  or 70% subject to maximum of Rs.1.40 lakh depending on Unit cost
Age 21 – 55 years
Annual income Maximum Rs.2,00,000
Gender Male/Female
Category Minority community


T-IDEA stands for “Telangana State Industrial Development and Entrepreneur Advancement” incentive scheme. This scheme is especially for general category entrepreneurs. This scheme provides additional 10% investment subsidy on fixed capital investment limited to Rs.
10.00 lakhs to MSE’s which are solely owned by women. Following are some of its benefits:

Loan amount Upto Rs.20 Lakhs
Subsidy on investments 15% limited to Rs.20 lakh 
Category General
Interest rates 3%-9%
Gender Male/Female

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

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

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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