Indian Central Government Schemes That Gives Loans To Start A Business

If you want a loan to expand to grow your business or want to start a new business and need money, then this post is going to help you a lot. I will tell top central government schemes which give loans to new small, and medium business owners. Additionally, I will cover who can get the loans and what are the eligibility criteria to get the loans.

From time to time the central government of India announces various loan schemes that help Indian entrepreneurs and businessmen financially. Most of the schemes are beneficial for new, small and medium businesses. If you are a new businessman, existing businessman, or self-employed professional, you must know these central government schemes that give you loans.

PMMY Pradhan Mantri MUDRA Yojana Loan

The full form of PMMY is Pradhan Mantri MUDRA Yojana. PMMY schemes is launched in 2015 by the central government of India. The main purpose of this scheme is to help the new and small business owners by giving loans starting from 50,000 to 10,00,000. The good thing about this scheme is that you can get loans without any collateral.

Pradhan Mantri MUDRA Yojana gives loans under three categories Shishu, Kishore, and Tarun. Under Shishu schemes, you can apply for loans up to 50,000 Rs. The Kishor schemes can give you a loan from 50,000 to 5,00,000 Rs and under the Tarun scheme, you can apply for a loan from 5,00,000 to 10 lakh Rs.

Interest Rates On MUDRA Yojana Loan

Loan SchemeLoan AmountInterest Rate
Shishu0 – 50,0001% to 12% per year
Kishore50,000 – 5 lakh8.60% to 11.15% per year
Tarun5 lakh – 10 lakh11.15% to 20% per year

Eligibility For Mudra Loans

  • Small business owner who manufactures products.
  • Shopkeepers.
  • Fruit and Vegetable vendors.
  • Artisans who made things from hand.
  • Any Activities that are related to agriculture such as pisciculture, bee keeping, poultry, livestock, rearing, grading, sorting, aggregation agro industries, diary, fishery, agriclinics and agribusiness centres, food & agro-processing.
  • Loans is not available for land improvement such as canal, irrigation and wells.

MSME Micro Small & Medium Enterprises Loan

The 2nd popular loan scheme from the government of India is the MSMEs loan. The full form of MSME is Micro Small And Medium Enterprises. As its name suggests the loan is for Micro, Small, and Medium Enterprises. So, if you are trying to set up a factory and need to buy machines, then you should apply for this loan. Now, if you need money for any of the below things then you can apply for an MSME loan

  • Acquisition of factory, land and construction of building spaces.
  • Purchase of Plant and Machines including lab equipment, testing equipment, furniture, electric fittings.
  • Meeting working capital requirements, like raw materials, stock-in-progress, finished goods.
  • Trade Finance (Bill discounting) – for paying the creditors, while awaiting payment from debtors.
  • Launch of new product range, expansion of business, warehousing need, credit for marketing and advertising purpose.

How Much Money Can I Get In MSMEs Yojana Loans

Now, if you are confused about whether your business is a Micro, Small or Medium Enterprise, then consider your turnover or profit. If your turnover is less than 5 crores then you can apply under the micro scheme for a loan up to 1 Crore. Any company whose annual turnover is less than 50 crore is a small enterprise and can apply for a loan up to 50 Crore. The last type of enterprise is medium and any company whose turnover is not more than 250 crore falls under it. Now, if you are a medium enterprise you can apply for a loan of up to 50 crores.

 Type Of Enterprises  Loan Need for Plant & Machinery or Equipment  Annual Turnover
  Micro  Not more than Rs. 1 Crore  Not more than Rs. 5 Crore
  Small   Not more than Rs. 10 Crore  No more than Rs. 50 Crore
  Medium  No more than Rs. 50 Crore  No more than Rs. 250 Crore

Interest Rates for MSME Loans

Interest rates for MSMEs loans are not constant and depend on the bank where you are applying for the loans. Most government banks give loans under MSMEs schemes. Below are the list of some banks and the rate of interest rates that they offer. These rates are not constant and vary from time to time. So, please visit the bank and ask for the interest rate before applying to any of these banks.

Bank NameInterest rate
Allahabad BankVisit the bank to know the interest rates
Oriental Bank of Commerce10.70% p.a. onwards
Andhra BankVisit the bank to know the interest rates
ICICI Bank13% p.a. onwards
Central Bank of India11.25% p.a. onwards
Indian Bank9.75% p.a. onwards
Punjab and Sind Bank9.95% p.a. onwards
Punjab National BankVisit the bank to know the interest rates
State Bank of India7.65% p.a. onwards
Syndicate BankVisit the bank to know the interest rates
UCO Bank8.85% p.a. onwards
Union Bank of IndiaVisit the bank to know the interest rates
United Bank of India10.25% – 16.25% p.a.

SUI Stand-Up India Loans For ST SC Women

The full form of SUI is Stand Up India and mainly helps women business owners. The main purpose of SUI loan schemes is to encourage women businesses owners who fall under SC and ST categories. SUI or Stand Up India schemes gives loans from Rs 10 Lakh to 1 Crore to SC and ST women, who need financial help to set up greenfield industry. Greenfield industry basically manufactures agriculture-related products or involves trading sectors.

An enterprise can also apply for this loan if the 51% of ownership belongs to the SC/ST Women. You can apply for a loan directly at the portal or by directly contacting a Lead District Manager.

Eligibility To Get Stand Up India Loan

You can apply for SUI loans if you full fill below conditions.

  • You must be a indian citizen.
  • The requestpror must be a ST/SC Women.
  • An enterprise whose owner is a women and falls under SC/ST category.
  • Your enterpise must be related greenfiled or trading sector industry.
  • Borrower should not be in default to any Bank or Financial Institution.

PM SVANidhi Loans For Street Vendor

Many street vendors are heavily impacted due to covid and they immediate help. Hence, the government of India launched PM SVANidhi loan yojana only for street vendors. Under PM SVANidhi a street vendor gets a loan of up to Rs 10,000 and can start a new business or reestablish the existing business.

Vendors such as hawkers, thelewala, rehriwala, theliphadwala in different areas are eligible for this loan. Any vendor who supplies vegetables, fruits, ready-to-eat street food, tea, pakodas, bread, eggs, textile, apparel, footwear, artisan products, books/ stationery can also apply for this loan.

Anyone who runs barber shops, cobblers, pan shops, laundry, and runs small shops which were impacted by covid.

Eligibility To Get PM SVANidhi Loans

  • You must be an Indian Citizens.
  • You state must be a part of Protection of Livelihood and Regulation of Street Vending. State lists are available here.
  • Street vendor must have certificate of vender or Identity card issued by Urban.
  • Street vendor is eligible if found as a part of survey even if do not have certificate of vender or Identity card issued by Urban.
  • Must have a phone number linked with Aadhar Card.

Conclusion On Government Schemes That Give Loans

The government of India is issuing many schemes that give loans with lower interest rates to boost the business industry. Above is a list of some of the popular government schemes that give loans. If you find yourself eligible then apply online or visit the nearest CSC center and apply from there.

Learn More About Gov Schemes From Here

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