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All kinds of businesses, be they big or small, require adequate funding and credit support for their businesses to run smoothly. When it comes to micro, small and medium enterprises, the Government of India has launched a variety of schemes to help these entities have easy access to loans and subsidies. By doing so, the government aims to improve the entrepreneurial spirit while also helping MSMEs grow and thrive. Continue reading to explore some of the most popular government MSME loan schemes of 2024. 

Government MSME Loan Schemes

MSME Government Loan Schemes 2024

Here are three popular schemes under the Government MSME Loan Schemes, 2024:

  • PM MUDRA Loans 

  • PMEGP or Prime Minister's Employment Generation Programme 

  • CLCSS or Credit Linked Capital Subsidy Scheme.

PM MUDRA Loans

Pradhan Mantri MUDRA Yojana, or what is popularly called the Mudra loan, was launched in 2015 by the Government of India. MUDRA loans are aimed at boosting income and employment generation. The scheme offers loans of up to ₹20 lakhs, as per the recent budget announcement in 2024.

The 3 major categories of Mudra Loans are:

  • ‘Shishu’

    Offers coverage of up to ₹50,000 and is suitable for new and upcoming enterprises.

  • ‘Kishor’

    The financial limit for the loan ranges between ₹50,001 to ₹5 lakhs. Kishor is ideal for businesses aiming to grow and expand.

  • ‘Tarun’

    For loans exceeding the limit of ₹5 lakhs.

How to Apply? 

  • You may avail of these Mudra loans by filling out an online application on the official website

  • MUDRA loans can also be sanctioned at any private or public sector banks, small finance banks, NBFCs, etc. 

Read Also: How to Calculate Working Capital Requirement for Your Business

PMEGP

Pradhan Mantri Employment Generation Programme or PMEGP is a credit-linked subsidy scheme, launched in 2008. The scheme comes under the supervision of the Ministry of Micro, Small, and Medium Enterprises with Khadi and Village Industries Commission as the implementing agency on the national level. 

Here are some of the features of the PMEGP scheme:

  • The programme aims to create employment opportunities in both: urban and rural areas. 

  • It also facilitates the inclusion of financial authorities to enhance credit flow. 

  • The assistance is only to be offered to new projects.

  • The programme offers support in two ways. First, for setting up new units. Second, for the upgradation of existing units under MUDRA or PMEGP. 

  • Under the general category of the scheme, the beneficiary's contribution is 10% of the project cost, while subsidies for urban and rural areas are 15% and 25% respectively. 

How to Apply:

You may apply by visiting the official website. Just follow the given procedure step by step. 

CLCSS

The CLCSS or Credit Linked Capital Subsidy Scheme, as the name suggests is a capital subsidy programme. It was launched to help companies with the upgradation of their technology, ultimately, helping boost their productivity and services. The CLCSS loans can be used to purchase machinery or for the industry's plant’s upgrade. 

Here are some of the features of the CLCSS scheme:

  • The scheme is applicable for micro and small enterprises with a valid UAM number. 

  • The scheme offers an upfront capital subsidy of up to 15% on the institutional expense by micro and small entities, including village, khadi, and coir units. 

How to Apply:

  • You can send an online application via Public Lending Institutions or PLIs. 

  • The PLI then uploads the completed application using an online application and tracking system. Following this, the nodal agency recommends the application to the office of DC which is responsible for the release of funds. 

Bottom Line

The government has launched a variety of MSME loans to help MSMEs with financial security needed for their as well as the growth of the overall economy. As a small and medium enterprise, you must consider leveraging these loans to enjoy the benefits. They help you with your capital requirements, their interest rates are also comparatively lower, plus their repayment terms are quite flexible. 

Additionally, most of these loans have no requirements of collateral, making them more accessible to everyone. MSMEs can easily apply for these loans or get their benefits via banks, NBFCs, or credit schemes.

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