Bank Credit Facilitation Scheme for MSME is the link between MSMEs and several financial units (Banks) to fulfill the credit requirements. In this regard, the National Small Industries Corporation (NISC) has made Memorandum of Understanding (MOUs) with various nationalized and private sector banks. Especially, to have easy and simpler accessibility of fund management to all MSMEs.
Advantages of the Bank Credit Facilitation Scheme for MSMEs
The Scheme aids the growth of MSMEs by providing multiple benefits, such as:
- Provides financial support in form of credit through various nationalized and private sector banks under various loan schemes (discussed further in the article).
- Assists MSMEs to upgrade their competence. This could be in terms of business and technologies by getting rated through renowned and professional rating agencies that have an MOU with NSIC.
- Further, the NISC is responsible for the documentation and process for rating with no additional cost.
- Additionally, if MSMEs get rated under NSIC- “Performance and Credit Rating scheme” will have the liberty to get rated by anyone of the rating agencies of their preference.
- Provides the option to switch from the present account to a different bank or apply to a new bank for credit support
- Under this scheme, credit proposals made by MSMEs through NSIC are given higher priority.
- Credit obtained by MSMEs through NISC has a liberal rate of interest.
- Also. NISC will handle the application and sanction process with no additional cost and in minimal time.
Objective of the Scheme
The main goal of this scheme is to eliminate the decline or stagnation of MSME growth. Adversely affected due to financial constraints. Also, support MSMEs who lack the skill of approaching and applying for credit sanction. Achieved by taking care of the documentation process. Thus, primarily acting as a pathway to a large number of banks and ultimately credit.
The key targets are the registered MSMEs that have prospective growth, however, are hindered by the financial constraints. Additionally, helps promote MSME credibility by assisting it to get rated by a rating agencies.
Nature of Assistance
The Scheme assists in the following ways:
- The complete documentation relating to the submission of the credit proposal to banks will be undertaken by NSIC.
- Helps with non-fund-based limits such as guarantees, foreign bank guarantees, letters of credit, etc.
- Helps avail Term Loans for acquiring fixed assets such as building, land, plant, machinery, etc., Also for modification, expansion, etc.
- Provides working capital requirement facility to meet the functioning capital needs of the MSME. In the form of cash as credit, overdraft on current account and discounts on bills.
Note 1: Credit availed under the scheme is subject to terms and security norms of the lending bank, but the MSME can choose the bank based on terms suitable for the unit.
Note 2: Additionally, the repayment period of the loan availed is based on the income generated by the unit. Nonetheless, this will range from 5 to 7 years and can extend up to 11 years in some exceptional cases.
For any Queries regarding a loan, drop a mail to firstname.lastname@example.org.
All Micro, small and medium scale industry entrepreneurs are eligible to avail benefits of the scheme.
The Necessary Documents to Apply for Bank Credit Facilitation Scheme for MSME
- Identity Proof
- Residential Proof
- Business Address proof
- Asset and Liability Statements (promoters, guarantors, directors, etc.) along with the latest income tax returns.
- Rent Agreement or Lease Deed in case the unit is under rent or lease
- SSI registration certificate or Entrepreneur’s Memorandum
- List the complete profile of the Unit
- Balance Sheet with IT/ST returns (3 years)
- Predictable Balance Sheet (2 years)
- Application form
- CMA data
- Position of accounts with existing bankers
- Project Report
- Partnership Deed/Trust Deed/Rules & Bye-laws/Memorandum and Articles of Association /Certificate of Incorporation etc.
- Clearance from Pollution Control Board
- Sanction from Electricity Board and other constitutional officials.
List the Month-wise production and sales data for the current financial year. Also, mention the value of stock in process, finished goods, debtors, creditors, etc.
How to Apply
To apply for credit under this scheme, download the application form available at the official website of the NSIC linked here. Following download, duly fill in the required details and submit the form to a delegated officer. However, the forms and the format vary with each bank. Hence, the list of the same concerning their application procedures are available here, link