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4E Loan scheme

  • 19-Feb-2024

The 4E loan scheme is an initiative by the Small Industries Development Bank of India (SIDBI) aimed at supporting micro, small, and medium enterprises (MSMEs) in implementing energy-efficient measures and technology upgrades. MSME's are eligible for loans to cover the costs of installing energy-saving measures, upgrading energy-saving machinery with new technologies, and investing in rooftop solar.

Objectives of 4E Scheme

  • The objective of this scheme is to adopt new energy-efficient technologies to improve the production process and the quality of the product. So that MSME can increase its reach in the global market.
  • To reduce energy consumption and reduce energy costs. This will increase the profitability of MSME and its competitiveness.
  • To reduce greenhouse gas emissions and environmental pollutants.

Purpose of 4E Scheme

  • Implementing energy efficiency measures from start to finish. This means focusing on implementing technologies in which machinery consumes less energy and produces more output.
  • The purpose of this scheme is to provide loans to meet the purchase and capital expenditure costs of equipment, machinery, civil works, installation, and commissioning.
  • Note: Under this scheme, loans are not given for second-hand machinery, equipment, land, or the construction of buildings.

Benefits of 4E Scheme

  • With the help of this 4E scheme, MSMEs can save 10% to 25% on energy costs.
  • MSMEs were provided technical and financial consultation at minimum charges.
  • Loans are given to MSMEs at low interest rates and on simple terms and conditions.
  • Under this scheme, MSMEs were given ideas on how they could reduce excess energy consumption with the help of solar energy.
  • SIDBI can consider financing for the projects under its existing schemes.

Eligibility Criteria

  • Only Micro, Small or Medium Enterprises can apply for this scheme. MSME unit should be related to service and manufacturing sectors.
  • MSMEs that need machinery or funds to switch to cleaner fuel are eligible. Such as solar, electric, natural gas, etc.
  • The MSME unit should be running for 1 year and should not be in default with any bank or NBFC.
  • MSMEs should also have a detailed project report, which they will submit along with the documents.
  • The MSME unit should be according to the environment and social management framework.


  • Up to 90% of the project cost will be financed.
  • The minimum loan amount is Rs. 10 lakhs, and the maximum loan amount is not to exceed Rs. 1.50 crore per eligible borrower.

Upfront Fee

  • Upfront fee should be 0.50% of the loan amount

Rate of Interest

  • Rate of interest will range from 7% to 9% per annum

Repayment Period

  • The repayment period is 5 years, can be extended up to 7 years; it depends on the case.

Security Details

  • Assets that were purchased for this project have not been charged to any other lenders.
  • Collateral security, wherever necessary, for adequate asset coverage. CGTMSE cover may be taken if necessary.
  • Personal guarantee of the Promoters

Documents required

Documents required for the SIDBI 4E Scheme is listed as follows:

  • Filled application form
  • Processing Fee in advance
  • MSME registration certificate
  • Udyog Aadhaar certificate
  • GST Documents


SIDBI 4E Scheme Application Procedure

The application procedure for the SIDBI 4E Scheme is explained in detail below:

Eligible MSMEs can visit the SIDBI website and proceed to the online application page to apply for the scheme.

The Online Registration Login page tab will appear. The applicant will click on it to register as a new user. Applicants must provide the enterprise name, phone number, email, and proposed total loan requirement. After successful registration, a username and password will be provided.

After logging into the portal, the applicant must complete the one-page application and built-in checklist, and upload all the required documents.

Borrowers can contact SIDBI by visiting the nearest branch. SIDBI will approve the loan application after conducting official due diligence.


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