Government of India has launched various schemes to promote employment, meet day to day business related expenses of one’s own business and helping the poor and needy people, so that they can benefit from these schemes.
One of the best schemes launched by the government of India is MSME .M stands for Micro, S-small, M-medium and for E-enterprise. This scheme was launched in the year 2000. The main control of this scheme is in the hands of Government of India and RBI. In this scheme loans are given to the start up owners, women who want to start their business and small business owners to meet their day-to-day expenses like (purchasing raw material, promotion) and many other reasons without keeping any collateral securities to the financial institutions. This loan is given by the financial institutions at their own risks.
Various banks like State bank of India, UCO bank, Indian Bank, United bank of India give MSME loans at lower interest as compared to other financial institutions. The Maximum loan offered by the financial institutions is 2 crores without any fixed minimum limit. The processing fees is only 3% of principal amount. There are no hidden charges. The banks give duration of 12 months to 15 years for loan repayment.
Benefits of this Scheme and its main features
- The loan amount is easily approved and credited in the bank account of the loan holder.
- The bank charges very low rate of interest on MSME loan scheme.
- The main benefit is that even the weaker section of society can take the loan from the bank under this scheme as no collateral security is required.
Eligibility Criteria
- People who are of age 21 and more can only opt for this loan
- The businessman should not a de faulter of any financial institution. He should have a clean financial record.
- Financial Institutions also see the type of business the business owners will be dealing in and sanction the loan accordingly.
- Bank looks into the business plan and strategy of the person who has applied for loan.
The documents required to apply for this loan are
- Aadhar card, Pan card for KYC
- Business address proof.
- Latest six months bank statement
- And other documents required by NBFC
How to apply for this loan
- Through the website
Step 1: Visit the bank website like https://www.unionbankofindia.co.in/english/apply-for-msme-loan.aspx. Then click on apply button.
Step 2: Application form will appear, which the loan seeker has to fill in and submit.
Step 3: Then the bank representative will call after some days and verify the requirements and inform about the documents required to be submitted for loan approval.
Step 4: After all the document verification and the lender signing the agreement with the bank and completing all the process his account will be created within 48 hours.
The customer can himself visit the nearest bank with the loan application form and apply for loan.
Thus, this MSME loan scheme has been a blessing for many people. But many people are not aware about this scheme. Thus, the government is taking necessary measures to make people aware about this scheme through newspapers, electronic media, and word of mouth in banks. This scheme has played a major role in supporting the backbone of our society ie the unemployed people.
