Over 110 million people in India will be employed solely by the MSME sector by 2020. According to a Livemint analysis, the sector contributed 30% to GDP and 48% to exports in addition to creating jobs.So you can see why the government does everything in its power to promote the sector's growth and strengthen its infrastructure and encourage to register their business on MSME Registration,
The government has introduced numerous company credit programmes throughout the years, like the Bank Credit Facilitation Scheme, to support goals of this nature.
➨Brief Overview of the Bank Credit Facilitation Scheme
It is simply a contract or memorandum of understanding between the National Small Industries Corporation (NSIC) and a number of Indian national and private banks. Such a contract is created to assist small and medium-sized businesses in meeting their credit requirements and gaining access to business loans from both commercial and public institutions. MSMEs can get the necessary help with a loan application, documentation, and other requirements under this programme.
It should be noted that this assistance plan is open to all legally operating, government-recognized businesses, whether they be small, medium, or micro enterprises. However, in order to apply for a loan under this programme, they must have a KYC-compliant account.
➨Loans Available Under the Bank Credit Facilitation Programme
Under this programme, you may apply for any of the following business loans:
Maximum Working Capital
The loans falling under this category can be in the form of open cash credits, bill discounting services, and overdraft facilities against book debt.
Limit not based on funds
Letters of credit, credit letters, and foreign bank guarantees are examples of this sort of loan guarantee. Entities must set up a credit account that permits account holders to withdraw money up to a predetermined credit limit in order to take advantage of this credit facility.
loan terms
Depending on your needs and ability to repay, you can apply for long-, medium-, or short-term loans. Businesses typically apply for this loan to finance equipment purchases or other significant costs involved in starting up or growing a business.
➨Important Characteristics Of Bank Credit Facilitation Programme
See the standout characteristics of this credit facilitation programme.
➧Provides MSMEs with access to loans by integrating banks from the public and private sectors.
➧Aids businesses in obtaining reduced financing rates through the Ministry's Performance and credit rating scheme.
➧Loans secured under this programme typically have repayment terms of 5 to 7 years. The same may last up to 11 years in certain extraordinary circumstances.
➧As part of this programme, the National Small Industries Corporation assists MSMEs in filling out and submitting the required forms.
➧MSMEs are given assistance while changing banks or moving account information between financial institutions. The programme offers assistance when opening a new account.
Also read msme registration for small business
➨Required Documents For Bank Credit Facilitation Scheme
You might need to provide a different set of paperwork depending on why you're applying for a business loan.
➧Evidence of Identity
➧Evidence of a home or office address
➧Recent ITR and Asset and Liability Statement
➧Lease contract or Rent Agreement
➧A copy of the Entrepreneurs Memorandum or the SSI registration certificate
➧Description of the unit
➧Balance Sheet reflecting the last three years' IT/ST returns
➧Envisioned balance sheet for the following two years
➧Shared CMA data in
➧When the limit is Rs. 100 lakhs or greater, the required format
➧Information on an account's status with current bankers
➧Project Report outlining the needs for term loans
➧Quotes from the building plan that has been approved, etc.
➧Memorandum and Articles of Association, Partnership Deed, Certificate of Incorporation, Trust Deed, etc.
➧Electricity Board approval or Pollution Control Board approval
➧Data on monthly production and sales, finished items, stock value, debtors, and creditors, among other things.
