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Government Assistance to Micro, Small and Medium Enterprises (MSMEs) Financial and Promotional

Definition of MSMEs
Type
Micro Small

Mfg.Enterprise
Up to Rs.25 lakh Rs.25 lakh to Rs.5.0 cr.

Service Enterprise
Up to Rs.10 lakh Rs.10 lakh to Rs.2.0 cr. Rs.2.0 cr. to Rs.5.0 cr.

Medium Rs.5.0 cr. to Rs.10.0 cr.

(Values indicate investment in plant & machinery)

Thrust Areas for Promotion of MSMEs


Adequate and Timely Credit (Term loans and Working Capital) Modernization & Technological Up gradation Integrated Infrastructure Quality Improvement Market Promotion Export Promotion Entrepreneurship Development & Management Development Capacity Building

Apex Organizations for MSMEs


Separate Ministry for Micro, Small and Medium Industries formed in 1999 for policy formulation and implementation National Board for MSMEs Representatives from Ministry, Financial Institutions, Industry Associations, etc.

National Level Organisations for Support to MSMEs


Small Industries Development Organisation (SIDO). Has 10 other Institutes under it for Training and Development in Marketing, Quality Promotion, Technology Up gradation, Product Testing, Designing, Incubation, Financing, Guarantees, etc. National Small Industries Corporation (NSIC) National Entrepreneurship Development Institutes (EDI, NISIET, NIESBD, IIE) Small Industries Development Bank of India SIDBI Venture Capital Ltd. (SVCL) SME Rating Agency of India (SMERA)

National Manufacturing Competitiveness Program (NMCP) of SIDO Marketing Support Assistance to MSMEs Support for Entrepreneurial and Managerial Development (Incubators) Quality Mgt. Standards and Quality Tools National Campaign for Investment in Intellectual Property Rights (IPRs) Mini Tool Rooms with Foreign collaborations Others being developed

Schemes for New and Existing Enterprises


SIDO

Entrepreneurial & Management Development Incubators- Business skills Development, Technology Identification, Project/Product Selection, Opportunity Guidance, Commercial Aspects, etc. Investment and Training in IPRs MSE Cluster Development Program-Finance for Dev. Of New Clusters and Infrastructure in Existing ones, Common facilities, Cost Sharing on Utilities, Marketing, etc. Credit Linked Capital Subsidy Scheme For Technology Up gradation

Schemes for New and Existing Enterprises


SIDO Credit Guarantee for MSEs by CGTMSE Purchase & Price Preference Scheme for MSMEs for Govt. Stores and Central Govt. Undertakings Market Development Assistance Scheme for Export Promotion - Participation in International Exhibitions/Fairs, Study Tours, Trade Delegations, Bar Coding Certification, etc.

Schemes for New and Existing Enterprises


NSIC Marketing Assistance Scheme- International and Domestic Exhibitions and Fairs, Consortia Marketing Exports Recognised Export House- Exports of Handicrafts, Leather goods, Hand tools, IT solutions, SSI Projects, etc. Bank Credit Facilitation Scheme- Term Loan & Working Capital - Preference to Credit Rated Companies Term Loan Scheme-For Machinery & Equipment Maximum limit Rs.5.0 lakh Bills Discounting Scheme

Schemes for New and Existing Enterprises


NSIC

Raw Material Assistance Scheme 90 days credit, bulk purchases, cash discounts Financial Support for Credit Rating Technical Support and Technology Transfers Technical Service Centres, Technology Transfer Centres Software Technology Parks Scheme for 100% Exports of Software NSIC Training-cum-Incubation Centres Infomediary Services Techmart Exhibition Annual International Tech Fair

SME Financing and Development Project (SMEFDP) of SIDBI


World Bank-led multi agency / multi activity Project on Financing and Development of SMEs IBRD, Department for International Development (DFID) UK, KfW Germany and GTZ Germany are the international partners in the Project Project is aimed at making SME lending an attractive and viable financing option & facilitate increased turnover and employment in the sector. Technical Assistance given for strengthening credit information system, credit rating, credit scoring, structuring of innovative products, capacity building of the participating banks, policy and regulatory issues and promotion of market oriented business development services for the sector. There are three main components of the Project Credit Facility Risk Sharing Facility Technical Assistance

Schemes for New & Existing Enterprises


Small Industries Development Bank of India-SIDBI Direct Credit Scheme Small and Medium Sectors Marketing Assistance Scheme - Term Loans Vendor Development Term loans, Wkg. Cap. & Bills Discounting Guarantee Scheme for SSIs and Service Sector Units SME IT Loans Refinance Scheme through Banks and SFCs/SIDCs Technology Up gradation, ISO Certification, Single Window, Composite Loan, Small Road Transport, etc.

Schemes for New & Existing Enterprises


SIDBI International Finance- PCFC, PSCFC, Forex Term Loans, Letters of Credit, Forward Contracts, etc. Marketing Assistance for Women-Indirectly through Corporates/Co-operatives/NGOs for market promotion activities Collateral Free Loans- Guarantee by CGTMSE Credit Linked Capital Subsidy Scheme Risk Capital Credit Rating Services - SMERA Venture Capital Software & IT

Maharashtra State Financial Corporation-MSFC

Schemes for New & Existing Enterprises

Term Loan assistance to medium & small enterprises Loan limit, Rs.5.0 cr

For fixed assets like land, building, plant & machinery. Expansion,Diversification, Technology development, Enlarging product mix/product range, Quality improvement including ISO 9000 series Certifications Eligible activities i) Industrial activities such as manufacturing, assembling, servicing, processing, preservation, transportation ii) Services like nursing homes, hotels, restaurants, tourism related activities iii) Medical practitioners are eligible for loan for acquiring electro medical and other equipment for professional use iv) Qualified professionals in management. engineering, architecture, accountancy etc. desiring to undertake expansion of their professional practice/consultancy ventures v) Other service activities declared as eligible under the MSME Act

Schemes for New Enterprises


MSFC-Proposed Schemes Term Loan assistance for:
Commercial Complexes, Multiplexes, marriage Halls, Group Housing/Residential complex, etc.

Small scale Industrial units should have SSI registration while Service enterprises should be registered with the appropriate authority

Credit Guarantee Fund Trust for Micro and Small enterprises (CGTMSE)
Credit available without collateral security Available to micro and small enterprises for setting up new enterprises or expansion/ modernizations/ technological up gradation/ diversification of existing enterprises in the manufacturing & services excluding retail trade Guarantee for Loans(Term loans and working capital) up to Rs.100 lakh per borrower Credit given through Member Lending Institutions (MLIS) including banks and branches of SIDBI

Features of the Credit Guarantee Scheme


CGTMSE stands guarantee up to 75%-85% of the loan amount to the MLI depending on the Status of the borrowing unit ( (Micro, Small or Women entrepreneurs) and Size of Credit Guarantee cover higher at 85% for Micro Enterprises with loans up to Rs.5.0 lakh, at 80% for MSEs owned/operated by women and MSEs in the north-eastern region In case of default by the borrower, CGTMSE pays off 75% / 80% of the loan amount of the lending MLI Guarantee fee of 1.5% and service fee of 0.75% of the loan amount is payable by the borrower Guarantee fee lower at 1% and service fee lower at 0.5% for loans up to Rs.5.0 lakh