Assignment 5
AIM :- Visit a bank/financial institution to enquire about various funding schemes
for small scale enterprise.
FUNDING SCHEMES FOR SMALL-SCALE ENTERPRISES
Small-scale enterprises (SSEs) play a significant role in economic development by fostering
employment, encouraging innovation, and contributing to industrial growth. However, obtaining funding
remains a major challenge for these enterprises. To support them, various banks and financial institutions
offer specialized funding schemes with affordable interest rates, collateral-free options, and government-
backed support.
To gain deeper insights, I visited State Bank of India (SBI), a leading public sector bank in India, to
inquire about their funding schemes for SSEs. SBI is one of the most trusted and widely accessible banks
in India, offering various financing options tailored for small businesses.
State Bank of India (SBI)
Name of the Bank: State Bank of India (SBI)
Type: Public Sector Bank
Headquarters: Mumbai, Maharashtra, India
Founded: July 1, 1955
Regulated by: Reserve Bank of India (RBI)
Website: www.sbi.co.in
Why Choose SBI for Small-Scale Enterprise Funding?
Largest Bank in India – Extensive reach with over 22,000 branches across India.
Government-Backed Schemes – SBI actively participates in MUDRA, Stand-Up India, and
CGTMSE.
Flexible Loan Options – Loans available with and without collateral.
Competitive Interest Rates – Business loans start from 8.50% per annum.
Fast Loan Processing – MSME loans approved within 7-10 days.
Digital Loan Processing – SBI offers MSME Loans in 59 Minutes for quick financing.
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Funding Schemes for Small-Scale Enterprises (SSEs) by SBI:
1. SBI MUDRA Loan (Under PMMY Scheme)
This scheme helps micro and small enterprises get funding without collateral security.
Eligibility Criteria:
Business should be engaged in manufacturing, trading, or services.
Entrepreneurs should be Indian citizens.
No major loan defaults in the past.
Features of the Scheme:
Loan amount: Up to ₹10 lakh
No collateral required
Interest rate: As per bank norms
Loan tenure: Up to 5 years
Documents Required:
Identity Proof: Aadhaar Card, PAN Card
Business Proof: Trade License, Udyam Registration
Bank Statements: Past 6 months
Loan Application Form
2. SBI Stand-Up India Loan
This scheme promotes entrepreneurship among women, SC, and ST entrepreneurs.
Eligibility Criteria:
The business must be in manufacturing, trading, or services.
Minimum loan amount: ₹10 lakh, maximum: ₹1 crore.
For partnerships, 51% ownership must be held by SC/ST or a woman.
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Features of the Scheme:
Collateral-free loans under CGTMSE coverage
Repayment tenure: Up to 7 years
1-year moratorium period for business setup
Documents Required:
Business Plan
Caste Certificate (for SC/ST)
PAN & Aadhaar Card
Bank Statements – Past 12 months
3. SBI SME Smart Score Loan
This is a working capital loan for small businesses based on their credit score.
Eligibility Criteria:
Registered MSMEs in manufacturing, services, or trading
Minimum turnover: ₹10 lakh per year
Credit score above 650
Features of the Scheme:
Loan amount: Up to ₹50 lakh
No collateral required for loans up to ₹10 lakh
Tenure: Up to 5 years
Interest Rate: Based on credit score
Documents Required:
Business Registration Certificate
PAN & GST Registration
IT Returns – Past 2 years
Bank Statements – Past 6 months
4. SBI MSME Loan in 59 Minutes
A quick loan approval scheme for MSMEs, enabling fast funding for small businesses.
Eligibility Criteria:
The business must be GST registered.
The applicant should have at least 6 months of bank transactions.
Only businesses with good financial records are eligible.
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Features of the Scheme:
Loan amount: ₹1 lakh to ₹5 crore
Approval in 59 minutes, disbursal in 7-8 working days
Interest rate: Starts at 8.50% per annum
Documents Required:
GST Registration Certificate
ITR Returns – Last 2 years
Bank Statements – Past 12 months
Loan Application Form
5. SBI CGTMSE Loan (Credit Guarantee Scheme for MSMEs)
This scheme helps small enterprises get loans without collateral.
Eligibility Criteria:
Business must be an MSME registered unit.
The company should not be in agriculture or retail trade.
Features of the Scheme:
Loan amount: Up to ₹2 crore
No third-party guarantee or collateral required
Repayment period: Up to 10 years
Documents Required:
MSME Registration Certificate
PAN & GST Registration
Financial Statements – Past 2 years
Bank Statements – Past 6 months
Funding Schemes Available for Small-Scale Enterprises:
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During my visit, I learned about several government-backed and bank-specific funding schemes. Below
are some of the most popular ones:
1. Pradhan Mantri Mudra Yojana (PMMY)
The MUDRA (Micro Units Development and Refinance Agency) Loan Scheme is designed to provide
financial support to micro and small enterprises that are not eligible for traditional bank loans.
Eligibility Criteria:
Business must be a non-corporate small enterprise.
Entrepreneurs must be engaged in manufacturing, trading, or service sectors.
The applicant should not have any loan defaults in the past.
Features of the Scheme:
Loans up to ₹10 lakh without collateral.
Categorized into Shishu (up to ₹50,000), Kishor (₹50,000 – ₹5 lakh), and Tarun (₹5 lakh – ₹10
lakh).
Competitive interest rates set by the bank.
No processing fees for Shishu loans.
Documents Required:
Identity Proof – Aadhaar Card, PAN Card, Voter ID
Business Proof – Trade License, Business Registration Certificate
Address Proof – Utility Bills, Rent Agreement
Bank Statements – Last 6 months
Income Tax Returns (if applicable)
2. SIDBI Make in India Soft Loan Fund for MSMEs (SMILE)
The SMILE scheme, launched by the Small Industries Development Bank of India (SIDBI), is designed
to help MSMEs scale their businesses.
Eligibility Criteria:
The applicant must be an MSME registered business.
The business should be involved in manufacturing or service-related activities.
Minimum loan amount: ₹25 lakh.
Features of the Scheme:
Loans offered at lower interest rates (starting at 8.36% p.a.).
Up to 10 years repayment period.
Suitable for expansion, modernization, and technology upgrades.
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Documents Required:
Business Plan
MSME Registration Certificate
Financial Statements – Past 2 years
KYC Documents of the Business Owner
3. Annapurna Scheme (Offered by Bharatiya Mahila Bank & State-Owned Banks)
The Annapurna Scheme is designed to provide financial assistance to women entrepreneurs who want
to start or expand food-related businesses such as catering services, tiffin centers, packaged food
businesses, or small restaurants.
Eligibility Criteria:
Women entrepreneurs engaged in food manufacturing or catering businesses.
The applicant must be aged 18-60 years.
The business should be legally registered.
A guarantor is required for loans exceeding ₹50,000.
Features of the Scheme:
Loan amount: Up to ₹50,000 (without collateral).
Interest rates as per the bank’s guidelines.
Flexible repayment tenure of up to 3 years.
No processing fees for loans below ₹50,000.
The loan covers working capital expenses, including the purchase of kitchen equipment, raw
materials, and delivery vehicles.
Documents Required:
Identity Proof – Aadhaar Card, PAN Card, Voter ID.
Address Proof – Electricity Bill, Rental Agreement.
Business Plan & MSME Registration Certificate.
Bank Statements – Last 6 months.
Loan Application Form.
Conclusion
Funding is crucial for the growth and sustainability of small-scale enterprises in a competitive market.
Banks like State Bank of India (SBI) offer multiple financing options, including government-backed
schemes tailored to the needs of SSEs. Entrepreneurs must carefully evaluate different schemes based
on eligibility, interest rates, repayment terms, and financial capacity before applying.
