What is an MSME loan and how to get it

The central government is trying to ensure that the business of the Micro, Small, and Medium Enterprises (MSME) sector can be run properly. The loan provided to MSMEs is called an MSME loan. MSME loan is available from all government and private banks of the country, as well as non-banking institutions, i.e., NBFC companies.

Micro, Small, and Medium Enterprises (MSME) are a very important link in terms of employment and the economy in our country. The Micro, Small and Medium Enterprises Development Bill-2005 (introduced in the Parliament on May 12, 2005) was made the MSME-2006 Act after the assent of the President. This Act has been named the Micro, Small, and Medium Enterprises Development Act, 2006.

MSME is an enterprise sector. This sector is of two types

1- Service Sector

2- Manufacturing, i.e., manufacturing sector.

The bank has started a digital platform where many services will help at once. Whether it is taking a quick loan or opening a completely digital and instant current account, all these tasks will be done easily on the digital platform of ICICI Bank. The current account will be opened with the help of Video KYC.

How to get an MSME loan?

MSME loan without collateral is available in the same way as another loan is available. It means small-scale industry loan loans must apply through proper channels by following a fixed procedure. Before applying for a loan, checking eligibility and collecting the necessary documents is mandatory.

After checking the eligibility and collecting the documents required for the MSME loan, then the MSME loan application has to be made. MSME loans can be applied through both online and offline modes. How to apply for a loan depends entirely on the lending bank or NBFC.

Bank ensures that people in business do not face any problem applying for loans, which is why online MSME loan is applied.

Who gets MSME loan- What is the eligibility?

To apply for an MSME loan, it is necessary to check the eligibility first. Because it is known only by eligibility whether the loan will be available or not. Different banks follow different eligibility criteria for MSME loans. However, there is little difference in eligibility.

Some eligibility is also the same. The eligibility criteria are something like this:

  • 18 years – 75 years persons are eligible to apply for MSME term loan
  • The business people must run the business for at least three years.
  • Must have CA-certified / audited balance sheet
  • The nature of the business for which the loan application is being made should be that of Proprietorship / Partnership / Private Limited Company / Limited Company / LL.

In which scheme MSME loan is available?

Through MSME loans, the Central Government endeavors to create an atmosphere of self-employment in the country. The government loan schemes in which MSME loans are available are as follows:

  • Prime Minister Mudra Loan Scheme
  • Credit Guarantee Fund Trust (CGTMSE)
  • Prime Minister’s Employment Generation Program (PMEGP)
  • Women entrepreneur scheme
  • Micro-credit scheme
  • Currency card
  • Credit guarantee fund
  • Equipment Finance Scheme

MSME loans can be obtained under all these schemes. Let us tell you if you want a business loan to expand your business.