Pathway to prosperity: Leveraging government schemes for expansion of MSMEs
22 July, 2024
Synopsis:
CGSS, CGTMSE, PMEGP and Pradhan Mantri Mudra Yojana are some government schemes under which you can obtain loans for expansion.
You can obtain funds as per your needs without requiring any collateral.
These schemes also offer comprehensive support in the form of mentorship and guidance.
Known as the engine that fuels the economy and provides jobs to several, expansion is one of the primary objectives of any micro, small and medium enterprise (MSME). MSME expansion helps these businesses strengthen their client base, expand, and boost revenues. Thanks to several government programmes, the expansion of MSMEs has become a reality. Here's how you, as an MSME, can utilise such initiatives for growth.
Government schemes for MSMEs for growth
The growth of SMEs is pivotal for the Indian economy. If India wants to become a US $5 trillion economy, MSME expansion is crucial. Among the several government schemes that you can opt for to avail funds are:
Credit Guarantee Scheme for Startups (CGSS)
CGSS is among the several government schemes for MSMEs offered by the Indian government to promote growth and expansion. Under this scheme, you can avail of collateral-free loans for your startup. With a credit guarantee of up to ₹ 10 crores, the scheme provides the funds to shape your expansion dreams. Under this scheme, you can easily obtain various short- and long-term loans to meet your needs.
Being recognised by the Department of Industrial Policy and Promotion (DIPP) is among the several criteria you need to fulfil to be eligible to obtain funds for expansion under this scheme.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
This is another government scheme you can leverage for MSME expansion. Offering collateral and guarantee-free loans to MSMEs, you can obtain funds easily through a simple application process. Eligible businesses in the manufacturing services sector can apply for funds under this scheme.
By streamlining the borrowing process, the scheme empowers MSMEs to fuel their expansion plans without stringent financial prerequisites. As an MSME, the scheme opens opportunities for you to grow and prosper.
Pradhan Mantri Mudra Yojan
Pradhan Mantri Mudra Yojana is another government scheme you can use to drive your expansion plans. Under it, you can avail funds under three categories - Shishu, Kishor and Tarun. While you can avail funds up to ₹ 50,000 under the Shishu category, under Kishor, you can get funds up to ₹ 5 lakhs. Under Tarun, you can get funds up to ₹ 10 lakhs. You can apply for funds based on your needs and the expansion stage of your business.Prime Minister’s Employment Generation Programme
The Prime Minister's Employment Generation Programme (PMEGP) is a popular government scheme where you can obtain loans to grow your small and mid-size business. This scheme offers subsidies to projects in the manufacturing sector of up to ₹ 50 lakhs. Projects in the service sector get a subsidy of up to ₹ 20 lakhs. That's not all. The scheme also provides a flexible repayment tenure ranging from three to seven years. This ensures you can easily pay the loan without any burden.
At the national level, the responsibility of implementing the scheme is with the Khadi and Village Industries Commission (KVIC). On the other hand, state KVIC directorates, District Industries Centres, and Coir Board are responsible for implementing the scheme at the state level. This scheme not only aims to promote the growth of SMEs but also generate employment opportunities in India's urban and rural areas. It seeks to give employment to several traditional and prospective artisans of the country.
Why opt for funds under government programmes?
Obtaining funds through these government schemes gives these benefits:
Tailored collateral-free funding: As an MSME, you can obtain funds per your needs without the need to pledge security. This eases the financial burden significantly.
Risk mitigation: This is another major benefit. These schemes provide credit guarantees to banks and financial institutions. This brings down risks, protects lenders and borrowers and makes it easy for you as an MSME to get credit and expand your operations.
Comprehensive support: Government schemes provide a lot of support to MSMEs beyond financial assistance. This support includes mentorship, guidance, and handholding, which are essential for growth.
Wrapping it up
These government schemes for MSMEs help you expand, boost revenues and improve business productivity. With HDFC Bank, you can easily apply for Business Loans under these initiatives. Click here to learn more and apply today.
Disclaimer: *Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
