A Comprehensive Guide On MSMEs Loan

India stands at the 5th position in the world economy as its finances are growing at a very fast pace. Small businesses, also called Micro, Small, and Medium Enterprises, play a big role in this growth. However, Small businesses struggle to get funding because they have limited capital and no valuable assets for collateral.

To help these businesses, the Indian government has launched many loan programs. These programs boost small businesses to borrow money at low-interest rates and with flexible repayment terms. This way, the MSME business can get the funds they need to grow and contribute to the Indian economy. 

MSMEs Loan,

What are MSME Business Loans? 

MSME loans are credit funds for businesses and individuals, including MSMEs, start-ups, and entrepreneurs. The loan amount provided is Rs. 2 crore without collateral, and the repayment period is up to 5 years, depending on the financer, as it varies from lender to lender. However, interest rates depend on the applicant’s profile and business needs.

Eligibility and Required Documents 

To apply for various schemes and loans, there are different requirements. Here are the general criteria:

1. Age: Should fall under the age category of 21 to 65. 

2. Citizenship: Must be an Indian Citizen. 

3.Business Type: Your MSME or startup should be registered as a sole proprietorship, partnership firm, company, or Limited Liability Partnership (LLP).

4. Credit Score: Your MSME or start-up should have a good credit score.

Government Business Loans for MSMEs

Here are the top five loan programs from the government that you can use to get the right loan for your business: 

  • Pradhan Mantri Mudra Yojana

The Indian Government launched this initiative to “fund the unfunded” to provide the required capital to small businesses. Micro-Units Development and Refinance Agency (MUDRA) operates the small business scheme. This organization’s role is to offer loans to companies with limited funds.

Under this loan scheme, entrepreneurs have three options to choose from:

  1. Tarun Loans: Rs 5 lakh to Rs 10 lakh.
  2. Kishor Loans: Rs 50,000 to Rs 5 lakh.
  3. Shishu Loans: Up to Rs 50,000.

The Indian government launched the MSME loan in 59 minutes, offering quick money to Micro, Small, and Medium Enterprises. This initiative aims to streamline the process of receiving credit for these businesses.

  • Credit Guarantee Scheme (CGS)

The Credit Guarantee Scheme (CGS) is a loan program from the government that helps small businesses. They can get the loan without having to provide any collateral. They just need to pay a fee to the lender to get the loan.

  • National Small Industries Corporation Subsidy

The National Small Industries Corporation is an organization that helps small businesses by offering major support. NSIC offers support with its Marketing and Credit Support Schemes.

  • Pradhan Mantri Employment Generation Program (PMEGP)

Pradhan Mantri Employment Generation Program offers monetary assistance for qualified initiatives, with the highest possible expense of Rs 25 lakh for the permitted sector and Rs 10 lakh for the trade sector. 


MSME plays a pivotal role in shaping the Indian Economy. To support these businesses, the government has launched several online business loans and schemes to boost them. By knowing your requirements, you can identify the best scheme for you.

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