What Are The Top 3 Government Business Loan Schemes In India?

There are several business loans in India that is offered by the government of India, Mudra loans, PSB loans in 59 minutes, etc. but here we have brought up the top 3 government business loan schemes. Prior to plunging into to the topic, you must know this fact, if you really call yourself an aspiring and enthusiastic entrepreneur.

At the beginning of 2020, India was stated as the only, truly rising market across the globe. And Micro, Small and medium enterprises (MSMEs) emerged as the most significant player in the nation’s growth. The MSME industry helps with over 40% of the total GDP and remains as a substantial source of employment for India’s rising population.

Acknowledging the significance of MSME growth in the after-demonetization period, the Indian government has started some new business loan schemes and uplifted the existing ones.

Here are the top 3 business loan schemes that the Indian government offers to support the SMEs financially.

‘MSME business loans in 59 minutes’ is perhaps the most widely talked business loan scheme right now. The scheme was introduced first in September 2018.

Under this scheme, both new and existing enterprises can apply for financial support up to Rs. 1 Crore. The actual procedure takes somewhere around 8 to 12 days to finish, on the contrary, the approval or rejection is declared within 59 minutes post the loan application submission.

The rate of interest depends on the kind of business and credit rating. To get information on the same, you may directly visit the SIDBI portal.

MUDRA stands for Micro-units Development and Refinance Agency which is an organization incorporated by the Indian government to give financial assistance to MSMEs.

The loans under the MUDRA loan scheme are provided in regards to ‘funding the unfunded’. are often stated as refinanced business loans too, which are approved and sanctioned by public sector banks, private sector banks, scheduled commercial banks, rural banks, small banks and co-operative societies that are the part of the scheme.

The loans are usually rendered to micro or small businesses functioning in the manufacturing, trading and services industry. The MUDRA loans are organized as under,

  • Shishu loans up to Rs. 50,000/-
  • Kishor loans up to Rs. 5,00,000/-
  • Tarun loans up to Rs. 10,00,000/-

For more information such as MUDRA loan eligibility criteria, you can also visit the official website of or udyamimitra from where you can even apply online for the loan.

The CGMSE was introduced in the year 2000 as a monetary assistance scheme for micro and small businesses.

It offers financial support without taking any collateral for both new and existing enterprise units that meet its eligibility criteria. The scheme offers collateral-free working capital loans up to Rs. 10 lakhs.

Although, for all credit facilities above Rs. 10 lakhs and up to Rs. 1 crore only principal security or mortgage of land and building linked with the building is acquired. Such eligible accounts are coated under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Assets built via the credit facility which are linked with the business unit are also taken into consideration as security if the loan amount surpasses Rs. 10 lakhs.

The business loans under CGTMSE scheme are financed by several public and private sector banks that are the part of the scheme.

The Bottom Line

These were the top 3 business loans that the government of India provides to finance the micro, small and mid-size businesses, if you are also willing to uplift your business notion but lacking funds these loans can stand out to be your best companion in financial perspective.

For in-depth and up to date information, you can also visit the official portals of the certain loan scheme. If your focus is to get more information on Mudra loan scheme, here is a thorough blog on the same which will help you throughout every significant perspective of .

Originally published at https://ajit11.kinja.com on October 12, 2020.