In order to meet the credit requirements of various small and medium-size industries, the National Small Industries Corporation (NSIC) has signed a memorandum of understanding with various national and private banks in India. This joint agreement is known as the Bank Credit Facilitation Scheme and aims to provide various MSMEs with the credit support that they need from national or private banks. The NSIC essentially assists the MSMEs in the documentation and filing process while submitting proposals to banks and other related activities. Under the Bank Credit Facilitation Scheme, all these facilities are provided free of cost to small and medium-sized industries.
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Micro, small and medium-sized business enterprises (MSME) are defined by the number of personnel that they employ. As the name suggests, these business enterprises are limited in size and throughout the world, outnumber large business enterprises by a big margin. The MSME sector in India is the largest after China and is engaged in the manufacturing of nearly 6000 products of various types.
Today, MSMEs operate in a variety of sectors such as telecommunications, healthcare and electronics and are said to be a major force in India’s growing economy. In order to help these MSMEs grow at a rapid scale government along with many financial institutions have come up with several business loan schemes so that these small-scale business do not fall short of funds. Bank Credit Facilitation Scheme was initiated by the National Small Industries Corporation in collaboration with various national and private banks in India to encourage the MSME sector.
Eligibility Criteria and Documents Required
Any micro, small or medium enterprise that have been registered already are eligible for the Bank Credit Facilitation Scheme. The documents to be submitted vary based on the purpose of the loan. The general documents as required are:
- An identity proof such as a voter id card, passport or driving license
- A proof of residence such as passport, driving license or even utility bills such as electricity or telephone
- A proof of address for your business
- Details of the assets of promoters, directors and guarantors. You will also need to furnish a liability statement along with most recent records of income tax returns
- A copy of the rent agreement or certificate of lease if the physical premises for your business enterprise has been taken on rent or lease
- You will also need to provide a copy of the SSI registration certificate and a memorandum of the entrepreneur
- A complete profile of your business enterprise should also be provided that should include the nature of the business activity, the address of activity, the name and address of the promoters, the experience of the company and shareholding patterns
- A balance sheet complete with statements of IT/ST returns from the past 2 years
- A projected balance sheet of the upcoming 2 years
- A duly filled application form
- A copy of the Credit Monitoring Arrangement (CMA)
- Records of existing bank account
- A project report for the term loan requirements
- Estimates, quotations and sanctioned building plans
- Deeds of partnership, trust, rules and bye-laws, memorandums, articles of association and a certificate of incorporation
- A certificate of clearance from the pollution control board and a sanction from the electricity board and other statutory authorities
- Month-wise records of data and sales of the current financial year, the value of stocks, finished goods and records of debts and credits
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How to Apply for Credit Facility?
To apply for a Bank Credit Facilitation Scheme you simply need to download the application form from the official website of the NSIC, where you can fill in all the required details and submit the form to a delegated officer. The kinds of loans that are available for MSMEs are:
- Loans specifically for acquiring fixed assets which could set up for developing new units and expanding the enterprise and for the modernization and diversification of new units
- Loans for working capital to meet the requirements of MSMEs in the form of open cash credit, overdraft against book debts and bill discounting facilities
- To provide handholding support to MSMEs
Features and Benefits
The Bank Credit Facilitation Scheme offers the following salient benefits:
- Easily available credit for MSMEs
- Ensuring assistance to MSMEs for filing and documentation for loan schemes
- Assisting MSMEs to get good interest rates
- Helping MSMEs to get financed from banks
- Facilitating credit availability for all kinds of MSMEs
Toll Free Number: 1800 115 565
FAQs on Credit Facilitation Scheme
Q1. What is a Bank Credit Facilitation Scheme?
Ans. To meet the funding requirements of MSMEs, the National Small Industries Corporation (NSIC) has signed a memorandum of understanding with several national and private banks in India. This scheme shall provide credit support of MSMEs nationwide with the help of public and private sector banks.
Q2. What are the Salient features of Bank Credit Facilitation Scheme?
Ans. Below mentioned are the features of Bank Credit Facilitation Scheme:
- Readily available funding for MSMEs
- Ensuring free of cost assistance to MSMEs for filing and documentation for loan schemes
- Assisting MSMEs to get low interest rates
- Helping MSMEs to get finance from public and private sector banks
- Facilitating credit availability for all types of MSMEs
Q3. How MSME loans can be availed under Bank Credit Facilitation Scheme?
Ans. MSMEs can download the loan application form from the NSIC’s official website and submit it along with required documents online or visit the nearest bank to submit the documents to the delegated officer.
Q4. Is there any cost for applying to this scheme?
Ans. No, there is no cost involved in applying for this scheme.
Q5. What are the types of loan facilities available in Bank for Micro, Small and Medium Enterprises (MSMEs)?
Ans. There are two types of loans available under this scheme as mentioned below:
- Loans specifically for acquiring fixed assets
- Working Capital Loans
Q6. Does the Bank Credit Facilitation Scheme also assist in the switching banks?
Yes, the credit facilitation scheme can also assist in switching banks.
Q7. Does the Bank Credit Facilitation Scheme also offer non-fund based limits?
The credit facilitation scheme also offers non-fund based limits such as guarantees, letter of credit and foreign bank guarantees.
Q8. What is the loan repayment period for loans?
The loan repayment period ranges from 5 to 7 years and is also dependent on the income generated from the MSME in question.
Q9. What are the Contact Details?
Contact Details: 91-11-26382032 (D),26920906 (D),26927160 (D),26926275 (Ext. 262/263/352)