Important Credit and Financial Assistance Schemes for Micro, Small and Medium Enterprises (MSMEs)

Credit and Financial Assistance to MSMEs

1) Prime Minister’s Employment Generation Programme (PMEGP)

Description: The scheme aims to generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures /projects/micro enterprises. Another objective is to provide continuous and sustainable employment to all segments of traditional and prospective artisans and rural/urban unemployed youths in the country, so as to help and to arrest migration of rural youths to urban areas. Third objective is to increase the wage­earning capacity of artisans and contribute to increase in the growth rate of rural and urban employment.

The scheme is implemented by Khadi and Village Industries Commission (KVIC), as the nodal agency at the National level. At the State level, the scheme is implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) and Banks.

Only new projects are considered for sanction under PMEGP.

Nature of Assistance: The maximum cost of the project/unit is: Rs. 25 Lakhs in case of manufacturing sector and Rs. 10 Lakhs in case of business/service sector.

Subsidy under PMEGP (% of project cost): General category 15%(Urban), 25%(Rural); Special Category (including SC / ST / OBC / Minorities / Women, Ex­servicemen, Physically handicapped, NER, Hilly and Border areas, etc.): 25% (Urban), 35% (Rural).

Who can apply: Any individual, above 18 years of age can apply (For project costing above 10 lakh in manufacturing and 5 lakh in service sector. He should have passed at least VIII standard). Self Help Groups, Institutions registered under Societies Registration Act 1860; Production Co-operative Societies and Charitable Trusts are also eligible.

How to apply: Only online application is accepted. The beneficiaries can submit their application online at

New initiative: Second dose of assistance up to Rs. 1.00 crore to existing and better performing PMEGP/ MUDRA units for up grading with subsidy of 15% (20% in hilly/NER).

2) Credit Linked Capital Subsidy Scheme for Technology Upgradation (CLCSS)

Description: The objective of CLCSS is to facilitate technology to MSEs through institutional finance for induction of well established and proven technologies in the specific sub-sector/products approved under the scheme.

Nature of Assistance: Upfront subsidy of 15% on institutional Credit upto Rs. 1.0 Crore (i.e. subsidy cap of Rs. 15.00 lakh) for identified sectors/ subsectors/ technologies.

Who can apply: Any Micro and Small Enterprises (MSEs) unit.

How to apply: Candidates meeting the eligibility criteria may approach 11 nodal Banks / Agencies.


Andhra Bank, Corporation Bank, Canara Bank and Indian Bank.

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

Description: Ministry of Micro, Small and Medium Enterprises and Small Industries Development Bank of India (SIDBI) jointly established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) in order to implement Credit Guarantee Scheme for Micro and Small Enterprises (MSEs). The corpus of CGTMSE is contributed by Government of India and SIDBI.

Nature of Assistance: Collateral free loan upto a limit of Rs. 200 lakh.

Who can apply: New as well as existing Micro & Small Enterprises.

How to apply: MSE meeting the eligibility criteria may approach eligible Banks / Financial Institutions/ Regional Rural Banks/NBFCs.

4) 2% Interest Subvention Scheme

Description: The scheme aims at encouraging both manufacturing and service enterprises to increase productivity and provides incentives to MSMEs for on boarding on GST platform which helps in formalization of economy, while reducing the cost of credit. The scheme is in operation for a period of two financial years (FY 2018-19 and FY 2019-20).

Nature of Assistance: The interest relief will be calculated at two percentage points per annum (2% p.a.), on outstanding balance from time to time from the date of disbursal / drawal or the date of notification of this scheme, whichever is later, on the incremental or fresh amount of working capital sanctioned or incremental or new term loan disbursed by eligible institutions.

Who can apply: All MSMEs who have valid Udyog Aadhaar Memorandum [UAM] and valid GSTN Number shall be eligible as beneficiaries under the scheme.

How to apply: MSMEs may apply to eligible lending institutions under the scheme.

For further details on eligibility and how to apply , please get in touch with us on email at, or call India MSME Helpdesk Tel. +91-22-28816486 or fill up the enquiry page on our website so we can get in touch with you.

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