VARIOUS SMALL BUSINESS LOAN SCHEMES IN INDIA

INTRODUCTIONy Running a business is never an easy task. One is bound to face

financial hiccups during the process. Whether you are a new generation entrepreneur venturing into a new business or an established businessman planning for a business expansion. y Banks are more conservative with their investment dollars. Unlike many venture capitalists or angel investors, they are far more likely to approve a loan for an established business over a startup or emerging company. This is largely due to the fact that they are investing the money of their depositors.

Scheme for Development of Industrial Infrastructure for SSI Sector (DII)y Setting up of industrial estates / development of industrial areas

including such projects found eligible under KVIC model. y Strengthening of existing industrial clusters / estates by providing increased amenities for smooth working of the industrial units. Setting up of warehousing facilities for SSI products / units. y Providing support services viz., common utility centre's such as convention halls, trade centre's, raw material depots, warehousing, tool rooms / testing centre's, housing for industrial workers, etc. y Any other infrastructural facilities which will benefit predominantly SSI units / entrepreneurs.

Schemes available with SIDBI.y Single Window Scheme to provide both term loan for fixed assets

y

y y

y

and loan for working capital through the same agency. It is applicable to projects with cost upto Rs. 50 lakhs. The Scheme is operated both by banks and financial institutions. Technology Development & Modernization Fund Scheme for providing finance to existing SSI units for technology up gradation/ modernization. National Equity Fund Scheme which provides equity support to small entrepreneurs setting up projects in Tiny Sector. Composite Loan Scheme for equipment and/or working capital and also for work sheds to artisans, village and cottage industries in Tiny Sector. Mahila Udyam Nidhi (MUN) Scheme provides equity support to women entrepreneurs for setting up projects in Tiny Sector.

Schemes available with SIDBIy Equipment Finance Scheme for acquisition of

machinery/equipment including Diesel Generator Sets which are not related to any specific project. y Venture Capital Scheme to encourage SSI ventures/subcontracting units to acquire capital equipment, as also requisite technology for building up of export capabilities/import substitution including cost of total quality management and acquisition of ISO-9000 certification and for expansion of capacity. y ISO 9000 Scheme to meet the expenses on consultancy, documentation, audit, certification fee, equipment and calibrating instruments required for obtaining ISO 9000 certification.

Schemes available with SIDBIy Micro Credit Scheme to meet the requirement of well managed

Voluntary Agencies that are in existence for at least 5 years; have a good track record and have established network and experience in small savings-cum-credit programmes with Self Help Groups (SHGs) individuals. y Technology Development & Modernization Fund SIDBI has set up Technology Development & Modernisation Fund (TDMF) scheme for direct assistance of small sale industries to encourage existing industrial units in the sector, to modernise their production facilities and adopt improved and updated technology so as to strengthen their export capabilities. SIDBI in July 1996 had permitted SFCs and promotional banks to grant loans for modernisation projects costing upto Rs. 50 lakhs

Schemes available with SIDBIy National Equity Fund

National Equity Fund (NEF) under Small Industries Development Bank of India (SIDBI) provides equity type assistance to SSI units, tiny units at one per cent service charges. The scope of this scheme was widened in 1995-96 to cover all areas excepting Metropolitan areas, raising the limit of loan from Rs. 1.5 lakhs to Rs. 2.5 lakhs and covering both existing as well as new units.

LOAN SCHEMES OF VARIOUS BANKSy y

y

y y

y Central Bank of India y Name of the loan : Cent Kalyani Credit facilities are available for Women Entrepreneurs for the following: Small Business : For entrepreneurs who intend to provide service (not a professional service) such as setting up a small lunch/canteen, mobile restaurant, circulating library etc. Professional and Self Employed : Entrepreneurs who are specially qualified/skilled and experienced like Doctors, Chartered Accountants, Engineers or trained in Art or Craft etc. Retail Trade : For entrepreneurs who intend to engage in retail trading of various commodities. Village and Cottage/Tiny Industries : For entrepreneurs who are engaged in manufacturing, processing, preservation and services such as Handloom, Weaving Handicraft, Food-Processing, Garment making etc. in village and small towns with a population not exceeding 50,000 utilizing locally available resources/skills.

LOAN SCHEMES OF VARIOUS BANKSy Small Scale Industries : To start a unit engaged in manufacture, processing or

preservation of goods. y Agriculture & Allied Activities : For women entrepreneurs who are engaged/intend to engage in agricultural and allied activities, such as raising of crops, floriculture, fisheries, bee-keeping, nursery, sericulture etc. and also trading in agricultural inputs.y Government Sponsored Programmes : Apart from the above schemes, women

entrepreneurs are also financed under the various Government Sponsored Programmes where Capital subsidies are available