NSIC – Interest Rate, Eligibility, Features, Types & Documents required

 

National Small Industries Corporation (NSIC) offers support and works for the growth and development of Micro, Small, and Medium Enterprises (MSMEs) nationwide. NSIC works under the Ministry of Micro, Small, and Medium Enterprises (MoMSME) for the promotion of these enterprises.

NSIC offers Credit support to MSMEs with the help of three major credit facilities:

• Raw Material Assistance (RMA) against Bank Guarantee
• Credit Facilitation through Bank
• Bill Discounting

Interest Rate offered by Banks under NSIC Scheme

With the objective to meet the credit needs of MSME units, the NSIC has signed an MOU (Memorandum of Understanding) with leading nationalized and private sector banks and non-banking financial institutions. Under this pivotal deal with the bank, NSIC enables MSME units to avail the credit support from the banks to successfully operate and manage their business venture.

The interest rates levied on MSME loan varies from bank to bank, banks typically charge floating interest rates. Certain significant sectors play a crucial role in deciding the interest rates, including the credibility of the venture and present and future viability and stability.

NSIC works with its wide network of branch offices and technical centers spread across the country. Its range of services includes financial assistance, core training, and incubation. NSIC offers integrated support services under finance, technology, marketing, and support services. The corporation also focuses on providing machinery on hire purchase basis and marketing in exports.

Eligibility Criteria

The eligibility criteria for unsecured business loan include:

• MSMEs falling under the turnover ranging between Rs. 5 crores or more and up to Rs. 250 crore
• Enterprise in successful operation for the last 3 years
• Under collateral for cash credit loans, banks require comprehensive details of the business and its feasibility
• Past loan repayment record, if applicable
• Good CIBIL score

Under the MSME scheme, the guidelines clearly mandate that banks shouldn’t accept any collateral if the loan amount is to the tune of Rs. 10 lakh. The upper limit can be raised to Rs. 25 lakh if the enterprise depicts a fabulous track record.

Also Read: What is the NSIC Registration process?

Comparison of Interest Rates on Business Loan Offered by Top Banks/NBFCs

Bank/NBFCs	Interest Rate
Axis Bank	10.75% p.a. onwards
Flexiloans	1% per month onwards
HDB Financial Services Ltd.	8% - 26% p.a.
HDFC Bank	10.75% - 25% p.a.
IDFC First Bank	10.50% p.a. onwards
Indifi	1.50% per month onwards
Kotak Mahindra Bank	16% - 26% p.a.
Lendingkart	12% - 27% p.a.
Mcapital	2% per month onwards
NeoGrowth Finance	15% - 40% p.a.
Tata Capital	12% p.a. onwards
UGRO Capital	9% - 36% p.a.
Bajaj Finserv	10% to 26%

Documents required

To avail the MSME loan, the following documents have been stipulated:

• Duly filled application form with passport-sized photographs
• Identity, Address, Age, Income, and Business address proofs
• Asset and Liability Statement of promoters, guarantors, directors, etc. with the latest income tax returns
• Rent Agreement / Lease Deed if business premises rented/leased
• Copy of SSI registration certificate / Entrepreneur’s Memorandum
• Profile of the Unit – Name and address of promoters, experience, nature of the activity, address of all offices/plants, shareholding pattern, etc.
• Last 3 year’s Balance Sheet with IT / ST returns
• Projected Balance Sheet for the next 2 years
• CMA data in the prescribed format if the limit required is Rs. 100 lahks and above
• Position of accounts with existing bankers
• Comprehensive project Report for term loan requirements
• Estimates / Quotations / Sanctioned building plan, etc.
• Document in support of Partnership Deed / Trust Deed / Rules & Bye-laws / Memorandum and Articles of Association / Certificate of Incorporation, etc.
• Clearance from Pollution Control Board
• Clearance from Electricity Board and other statutory authorities

Month-wise production and sales data for the current financial year, the value of stock in process, finished goods, debtors, creditors, etc.

Features & Benefits

• Facilitates credit to MSMEs through public and private sector banks
• Promotes the priority sector
• Option for the enterprise to switch over from one bank to another
• Mentoring in the documentation process for MSMEs
• Guidance at every step to MSMEs in obtaining the best interest rates
• Facilitate and guide MSMEs in availing the credit
• Handholding support to MSMEs

Types and Categories

• MSME Loan
• Working capital loan
• Term loan

Working capital loan: Under the working capital loan, a range of loans are disbursed to MSMEs to give impetus to their growth, these include:

• Current Account with overdraft facility
• Cash Credit facility
• Bills Discounting
• Short Term Unsecured Business Loans
• Loans under the CGTMSE scheme
• Guarantees
• Letter of Credit

Banks under the Credit Facilitation Scheme by NSIC – 2023

List of Banks

AU Small Finance Bank

Axis Bank

Bank of Maharashtra

Bank of Baorda

Canara Bank

Central Bank of India

Federal Bank

HDFC Bank

ICICI Bank

IDBI Bank

IndusInd Bank Ltd.

Karnataka Bank

Kotak Mahindra Bank

Punjab National Bank

State Bank of India

Utkarsh Small Finance Bank

Yes Bank

FAQs

Q. When was NSIC set up?

Ans: NSIC was set up in 1955 as a public sector undertaking under the Government of India.

Q. What is the difference between NSIC and MSME?

Ans. National Small Industries Corporation (NSIC), is a certified enterprise of the Government of India that works under the Ministry of Micro, Small, and Medium Enterprises (MoMSME) that promotes the growth of Micro, Small, and Medium Enterprises (MSMEs) in India. Whereas, MSME is itself a sector that comprises numerous Micro, Small, and Medium Enterprises.

Q. How can I get a loan from NSIC?

Ans. To apply for a loan under NSIC, an applicant is required to visit the official website of NSIC to download the application form for Bank Credit Facilitation Scheme and can visit the nearest bank branch and submit the application form along with the required documents.

Q. What is an NSIC certificate?

Ans: NSIC certificate or registration helps to promote MSMEs by offering Single Point Registration for Government purchase and credit rating scheme for small industries.

Q. What is the purpose of NSIC?

Ans: NSIC provides various services to Small Scale Industries (SSIs) and offers machinery on the hire-purchase scheme. It also develops prototypes of machines and sends them to SSIs for commercial production.

Q. Is MSME and NSIC the same?

Ans: MSME comes under the Ministry of Micro, Small and Medium Enterprises (MoMSMEs) whereas NSIC is an ISO-certified organization that comes under the Government of India and is a part of MoMSME. For registering purpose, the procedure is different and even the features and benefits varies.