Madhya Pradesh is one of the fastest-growing states in India, with a strong emphasis on the development of Micro, Small, and Medium Enterprises (MSMEs). The state government has launched several loan schemes to provide financial assistance to MSMEs in the region. These schemes are aimed at promoting entrepreneurship, generating employment opportunities, and accelerating the economic growth of the state. In this blog, we will discuss some of the MSME loan schemes available in Madhya Pradesh, along with their eligibility criteria, benefits, and state or central schemes. We will also discuss how Finline’s project report service can help entrepreneurs in Madhya Pradesh to avail of these loan schemes and start or expand their businesses.
Madhya Pradesh State Finance Corporation (MPSFC) MSME Term Loan Scheme
The Madhya Pradesh State Finance Corporation (MPSFC) offers term loans to MSMEs for the purchase of machinery and equipment, working capital, and expansion of existing units. The following are the eligibility criteria for the scheme:
| Loan amount | Up to 2 crore |
|---|---|
| Collateral | Required |
| Loan tenure | 5-8 years |
| Interest rates | 10.25%-14.25% |
| Age | Minimum age of 18 |
Mukhya Mantri Yuva Udyami Yojana (MMYUY)
The Mukhya Mantri Yuva Udyami Yojana (MMYUY) provides financial assistance to young entrepreneurs for setting up new enterprises in the manufacturing, service, and trading sectors. The scheme provides financial assistance in the form of loans and subsidies to eligible candidates to set up their businesses. The following are the eligibility criteria for the scheme:
| Loan amount | Up to 2 crore |
|---|---|
| Educational qualification | Minimum 10th |
| Loan tenure | Up to 7 years |
| Subsidy | Up to 15% on the capital investment in plant and machinery |
| Age | Between 18 and 40 years of age |
Mukhya Mantri Swarojgar Yojana (MMSY)
The Mukhya Mantri Swarojgar Yojana (MMSY) is a state government initiative launched by the state government of Madhya Pradesh. The main objective of the scheme is to reduce the unemployment of the state by providing collateral-free loans to its unemployed youth. Following are some of its highlights:
| Loan amount | Up to 10 lakhs |
|---|---|
| Collateral | Not required up to 2 lakhs |
| Loan tenure | 84 months |
| Subsidy | 15% on the capital investment in plant and machinery up to 30,000 |
| Age | Between 18 and 65 years of age |
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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