MSME loan is an unsecured loan that is provided by various banks and financial bodies to assist entrepreneurs to fulfill the expenses of a business. It stands for Micro, Small, Medium, and Enterprise which is established by the Indian government. It includes payment of salaries, buying raw materials, rent, investment in fixed assets, daily expenses, equipment, and machinery, cash flow management, and other financial purposes. It is inaugurated and managed by the Ministry of MSME. It includes manufacturing, production, preservation of goods, commodities, and processing. MSME loans are provided to business owners, women entrepreneurs. And startup owners on a short-term basis. The tenure of MSME differs from bank to bank. It is treated as the pillar of the Indian economy that is provided extensively to the development of the socio-economic of the society. It develops work and opportunities for employment for the rural and backward opportunities.
| Rate of interest | @8.50% onwards |
| Loan amount | Up to 2 crores |
| Loan tenure | Up to 60 months |
| Bank name | Interest rate | Processing fee |
| Bank of India | 8.00% | 1% |
| Canara bank | 8.50% | 1% |
| Indian bank | 8.00% | 1% |
| HDFC bank ltd. | 8.50% | 1% |
| Punjab & Sind bank | 8.50% | 1% |
| Indian overseas bank | 8.00% | 1% |
| Bank of Baroda | 8.50% | 1% |
| Central bank of India | 8.00% | 1% |
| Axis Bank Ltd. | 8.00% | 1% |
| Union bank of India | 8.50% | 1% |
| Punjab national bank | 8.50% | 1% |
| UCO bank | 8.50% | 1% |
| Standard Chartered Bank | 13.50% | 1% |
| United bank of India | 8.00% | 1% |
| State bank of India | 8.00% | 1% |
| Small Industries Development Bank of India (SIDBI) | 8.00% | 1% |
| Bank of Maharashtra | 8.50% | 1% |
MSMEs form a significant role in India’s GDP. It shares more than 29% of the GDP and is a pledge for 50% of the total exports of the country. It intends to increase the no. To 15 crores in the upcoming years. MSME produces and manufactures various types of products for international and domestic markets. It aids in the encouragement of growth and development of the coir industries, khadi, and village.
| Year | MSME GVA | Growth (in%) | Total GVA | Share of MSME in GVA (in%) | Total GDP | Share of MSME in GDP (in %) |
| 2011 - 12 | 2583263 | _ | 8106946 | 31.86 | 8736329 | 29.57 |
| 2012 - 13 | 2977623 | 15.27 | 9202692 | 32.36 | 9944013 | 29.94 |
| 2013 - 14 | 3343009 | 12.27 | 10363153 | 32.26 | 11233522 | 29.76 |
| 2014 - 15 | 3658196 | 9.43 | 11481794 | 31.86 | 12445128 | 29.39 |
| 2015 - 16 | 3936788 | 7.62 | 12458642 | 31.60 | 13682035 | 28.77 |
The difference between services and manufacturing firms has been excluded by producing the annual turnover and the amount of investment is identical for firms involved in both sectors.
| Sector | Manufacturing and service sector | |
| - | Investment | Annual turnover |
| Micro enterprise | Less than Rs. 1 crore | Less than Rs. 5 crores |
| Small enterprise | Less than Rs. 10 crores | Up to Rs. 50 crores |
| Medium enterprise | Less than Rs. 50 crores. | Up to Rs. 250 crores |
MSMEs are categorized based on the investment proportion given below.
Manufacturing sector
| Enterprises category | Micro enterprises | Medium enterprises |
| Investment in plant & machinery | Might not exceed Rs. 25 lakhs | More than Rs. 5 crores and not exceed Rs. 10 crores |
| Service sector | Micro enterprises | Small enterprises | Medium enterprises |
| Investment may not exceed Rs. 10 lakhs | More than Rs. 10 lakhs and may not exceed Rs. 2 crores | More than Rs. 2 crores may not exceed Rs. 5 crores. |
Eligibility criteria depending on several factors such as creditworthiness, age of individual, business turnover, total work experience, repayment history, etc. are as follows.
Hence knowing the facts about the MSME loan. Apply through financeseva for the best deals.
Also read: - MSME Loan for New Business - Check Eligibility & Interest Rate
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