National Small Industries Corporation (NSIC) provides support and works for the growth of the Micro, Small and Medium Enterprises (MSMEs) nationwide. NSIC works under the Ministry of Micro, Small and Medium Enterprises for the promotion of these enterprises. NSIC works with its wide network of branch offices and technical centres 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.
Banks/NBFCs Interest Rates under NSIC Scheme
NSIC offers interest rate to MSMEs from 10.50% to 12.00% per annum.
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 in availing 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 – 10.50 – 12.00% per annum. 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.
Banks under Credit Facilitation Scheme offered by NSIC:
|List of Banks|
|Bank of Maharashtra|
|Oriental Bank of Commerce|
|IndusInd Bank Ltd.|
|Kotak Mahindra Bank|
|The South Indian Bank|
|Tamilnad Mercantile Bank Ltd.|
|Bestdealfinance.com Pvt. Ltd.|
|Electronica Finance Ltd.|
|Jammu and Kashmir Bank Ltd.|
Eligibility, Fees and Charges
The MSME loan has been designed and developed to give impetus to the growth of the priority sector. According to socio-economic research on the priority sector, a substantial section of the population depends on this sector to sustain a livelihood. Priority sector comprises agriculture, education, housing, export credit, micro and small enterprises and host of other sectors stipulated by the government of India.
The eligibility criteria for unsecured business loan include:
- MSMEs falling under the turnover ranging between Rs. 30 lakh plus to up to Rs. 200 crore
- Enterprise in successful operation for the last three years
- Meticulous details business, raw material, work in progress, finished goods and viability
- 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.
To avail the MSME loan, the following documents have been stipulated:
- Document in support of Identity
- Document in support of Residence
- Business address proof
- 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 three year’s Balance Sheet with IT / ST returns
- Projected Balance Sheet for the next two years
- Filled in application in the prescribed format
- CMA data in the prescribed format if the limit required is Rs. 100 lakh 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 and benefits
- Facilitates credit to MSMEs through public and private sector banks
- Promotes the priority sector
- Option to the enterprise to switch over from one bank to another
- Mentoring in documentation process to MSMEs
- Guidance at every step to MSMEs in obtaining best interest rates
- Facilitate and guide MSMEs in availing the credit
- Handholding support to MSMEs
Types and categories
Working capital loan: Under the working capital loan, a range of loans are disbursed to MSMEs to give impetus to their growth, these include:
Ques.1: What’s the full form of MSME?
Ans.: Micro Small and Medium Enterprises.
Ques.2. How can a promising entrepreneur obtain loan from MSME?
Ans: MSME doesn’t directly offer loan to entrepreneurs. It mentors MSMEs and guides them in obtaining the loan form a consortium of banks and NBFCs.
Ques.3: I want to improve the skill of my staff. Does the MSME department provide professional training?
Ans.: Yes, MSME provides a range of courses to sharpen the skill set of professionals through its training and development centres spread across India.
Ques.4. Can an entrepreneur avail the loan directly from the bank?
Ans.: Yes, an entrepreneur can approach the bank directly. An authorized officer will guide the entrepreneur in meeting the guidelines and documentation process.
Ques.5. Does the MSME charge any fees for loan support?
Ans.: MSME doesn’t charge any fee against the support.