How to Apply for MSME Schemes: Eligibility & Benefits

Table of Contents

• What is MSME Scheme and Its Importance?
• Top Government Schemes for Financial Assistance to MSMEs in India
  • Pradhan Mantri Mudra Yojana (PMMY)
  • Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
  • Prime Minister’s Employment Generation Programme (PMEGP)
  • ZED Certification & Technology Upgradation
  • Credit-Linked Capital Subsidy Scheme (CLCSS)
• How to Apply for MSME Government Schemes?
• Conclusion

What is MSME Scheme and Its Importance?

MSME stands for Micro, Small, and Medium Enterprises, which was introduced in India in 2006 to promote the country's economic growth and development. MSMEs offer various schemes to leverage the small and medium enterprises and help provide many youths with employment opportunities. MSMEs contribute one-third of the country's GDP. It plays an important role in improving the livelihoods of the majority of the workforce and in industrializing the rural and backward areas of the country. To help these small and medium businesses, the government of India has introduced several schemes to empower MSMEs with financial support, loans, and infrastructure.

Top Government Schemes for Financial Assistance to MSMEs in India

Below are the top Government Schemes for Financial Assistance to MSMEs in India:

Pradhan Mantri Mudra Yojana (PMMY)

Pradhan Mantri Mudra Yojana (PMMY), a flagship scheme by the Government of India was launched in 2015. This scheme provides financial assistance of up to Rs. 10 lakhs to small scale businesses, artisans and individual units to start and leverage their businesses. It gives assistance in three segments:

• Shishu: Loans up to Rs. 50,000
• Kishore: Rs. 50,001 to Rs. 5 lakhs
• Tarun: Rs. 5 lakhs to Rs. 10 lakhs

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), an initiative introduced by the government of India in 2020, is a government scheme for startups that provides collateral-free loans to MSMEs. Through this scheme, lenders can obtain loans without taking on any risk for new or existing businesses. The scheme guarantees a loan amount of 75-80% of the loan amount. If you are seeking government schemes for startups, this collateral-free startup loan scheme will be beneficial.

Prime Minister’s Employment Generation Programme (PMEGP)

The Prime Minister’s Employment Generation Programme (PMEGP) was launched in 2008 with the aim of generating continuous and sustainable employment opportunities in Rural and urban areas of the country. This scheme consists of loan and grant assistance with a subsidy margin of 15% to 35%. This scheme is ideal for entrepreneurs and medium-sized enterprises to start and set up sustainable businesses.

ZED Certification & Technology Upgradation

The ZED Certification scheme was launched in 2022 with the aim of manufacturing goods in the country with "zero defects" and to ensure that the goods have "zero effect" on the environment. It was introduced to enable and facilitate MSMEs to adopt Zero Defect Zero Effect (ZED) practices. The scheme offers financial assistance to MSMEs for quality improvement. This scheme provides subsidies as per the following structure:

• Micro Enterprises: 80%
• Small Enterprises: 60%
• Medium Enterprises: 50%

Credit-Linked Capital Subsidy Scheme (CLCSS)

MSMEs need to expand and improve the quality of their businesses and can benefit from the Credit-Linked Capital Subsidy Scheme. This scheme offers 15% capital subsidy on institutional credit up to Rs. 1 crore to Micro, Small, and Medium Enterprises (MSMEs) for technology-based upgrades. This helps the businesses build modern infrastructure and improve design capabilities. This is an important scheme to leverage the MSME sector in encouraging technological advancements.

How to Apply for MSME Government Schemes?

Following are the steps to follow if you are seeking to apply for the MSMEs government schemes in India:

Step 1: Register on the Udyam Registration Portal to obtain a Udyam Registration Number (URN), which will facilitate access to many MSME schemes.

Step 2: Check the scheme you would like to apply for, including credit support, technology upgradation, marketing, skill development, etc.

Step 3: Check the eligibility criteria of the scheme you wish to apply for.

Step 4: Collect the required documents, such as the Udyam certificate, business PAN, GST number, bank information, project reports, etc., for document verification.

Step 5: Complete and submit the online application on the official MSME portal.

Step 6: Apply for a loan through a bank, an NBFC, or a government-linked departmental portal.

Step 7: Track your status through the MSME official platform.

Conclusion

As we have seen above, the government of India is focusing on leveraging the MSME sector to boost the country's economic growth. These initiatives will help in access to finance, technological upgrades, and market expansion. So, whether you run a small business or a medium enterprise, you will get a scheme tailored to the business needs that can take you to new heights.