Business loans &#8211; FlexiLoans Finance, Business Loan Blogs, Tips & Guide

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Choosing The Perfect Loan: Optimising Your Loan Amount With A Calculator

admin — Sat, 12 Aug 2023 13:14:00 +0000

Introduction

When it comes to taking out a loan, there is no doubt that finding the right balance between borrowing the necessary amount and avoiding unnecessary debt is crucial. That is where loan calculators come into play. These online tools can aid you in making informed decisions by providing insights into your monthly payments, interest rates, and overall loan amount. Here, we will explore different effective ways to optimize your loan amount using a calculator, all while keeping your financial well-being in mind.

Understand the Business Loan EMI Calculator Formula

Before we dive into the strategies, let us demystify the formula behind a business loan calculator. The most common formula used is the Amortisation Formula:

P=(r⋅PV) / 1−(1+r)⁻ⁿ

Where:

P = Monthly Payment
r = Monthly Interest Rate
PV = Present Value (Loan Amount)
n = Total Number of Payments

Now that you have the formula, let us explore how to optimise your loan amount effectively.

Tips to Optimise The Loan Amount with a Calculator

1. Determine Your Needs

Begin by assessing your needs and evaluating the exact amount you require. Avoid overestimating, as borrowing more than you need can lead to unnecessary interest payments. A business loan EMI calculator can help you determine the ideal amount that covers your business expenses without burdening you with excess debt.

2. Experiment with Loan Terms

The duration of your loan term can significantly affect your monthly obligations and the overall amount you repay. Use the loan calculator to experiment with different repayment periods. While longer terms may reduce your monthly payments, they can also increase interest costs over time. Here is an example to help you get this point better.

Suppose you wish to get Rs 2,50,000 in a business loan from FlexiLoans while expecting the interest rate to be around 11%. The impact of tenure on your budget will be as follows.

Parameters	Repayment Tenure
	1 Year	3 Years	4 Years	5 Years
Loan Amount	Rs 2,50,000	Rs 2,50,000	Rs 2,50,000	Rs 2,50,000
Interest Rate	11%	11%	11%	11%
EMI	Rs 22,095	Rs 8,185	Rs 6,461	Rs 5,436
Interest Payable	Rs 15,145	Rs 44,648	Rs 60,146	Rs 76,136
Total Payable	Rs 2,65,145	Rs 2,94,648	Rs 3,10,146	Rs 3,26,136

3. Play with Interest Rates

Interest rates are a vital factor in establishing your loan’s total cost. With a business loan interest calculator, you can input varying interest rates to see how they affect your payments and the total amount repaid. This insight will empower you to negotiate favourable rates with lenders.

4. Factor in Extra Payments

Making occasional extra payments can substantially reduce your loan’s duration and the interest you pay. Utilise the term loan EMI calculator to determine the impact of additional payments on your loan. Even small increments can lead to significant savings in the long run.

5. Analyse Different Loan Types

Not all loans are created equal. Different rate types offer distinct advantages, such as fixed-rate and adjustable-rate loans. Moreover, products that fall under the revolving loan category has other interest calculation method. You can use a term loan EMI calculator to understand which product or type rate fits your financial goals while keeping the borrowing cost low.

6. Consider Your Debt-to-Revenue Ratio

Lenders often assess your debt-to-revenue ratio to determine your borrowing capacity. This ratio means the percentage of your company’s revenue that goes toward existing debt repayment. If this ratio is below 50, the chances of getting instant approval at a low rate are high. Using the business loan calculator, you can gauge the impact of different loan amounts on your debt-to-revenue ratio. This insight will help you avoid stretching your finances too thin.

7. Avoid Unnecessary Fees

Origination fees and other charges can inflate your loan amount. Use the business loan EMI calculator to understand how these fees impact your overall repayment.

8. Plan for the Unexpected

Life is unpredictable, and circumstances can change. Utilise the loan calculator to model “what-if” scenarios. What if you experience a revenue loss or unexpected expenses? What if you lose your client? Adjust your loan amount in the calculator to ensure you have a safety net to fall back on.

9. Assess Your Future Financial Goals

Optimizing your loan amount goes beyond the present. Consider your future financial goals. Do you plan to invest, expand your business, or buy a new office? Factor in these aspirations when using the business loan calculator. By aligning your loan amount with your long-term objectives, you can set yourself up for greater financial success.

10. Review Your Monthly Budget

A loan should not disrupt your monthly budget. Use this business loan EMI calculator to determine the monthly payment that fits your budget comfortably. This proactive approach ensures that you are ready to manage your loan obligations without compromising your day-to-day business expenses.

Conclusion

Ensuring you get the right loan amount is important for your financial future. Using an EMI calculator for a and following the ideas in this article, you can make smart choices that match your goals. Remember, figuring out the perfect loan amount isn’t just about what you need right now – it also helps you have a better and safer financial future. So, give that calculator a try, think about what you need, consider different situations, and start your journey to being in control of your finances today!

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The Advantages of a Business Loan EMI Calculator: Simplicity and Accuracy

admin — Thu, 10 Aug 2023 07:04:00 +0000

Whatever the purpose is, funding should increase your revenue. You can use it for expansions, improvements, or working capital reserves. Planning a term loan is crucial since it enables you to do this. Thankfully, a FlexiLoans Term Loan EMI Calculator makes this procedure much easier. It is a vital tool in the toolbox of each business, and it is a free digital service. Let’s understand what online business loans are. Let’s also find out the advantages of using an EMI calculator for a business loan.

What is a Business Loan?

Financial institutions offer business loans online to fund your business and meet its needs. You can use the business loan online for various business expenses. You can use it for supplies, inventory, and equipment. The lender applies interest to the principal at a set rate. Use modern technology for quick calculations and for staying updated on company information. Gone are the days of complex EMI calculations. The business loan EMI calculator has the formula and gives precise results.

What is a business loan EMI?

The set sum of money that a borrower pays back to a lender each month is an EMI or Equated Monthly Instalment. The loan amount, the interest rate, and the length of the payback period decide the EMI amount. In India, a business loan online is repaid over one to five years at a monthly rate. These loans may have variable or fixed interest rates.

Throughout the loan’s term, your EMI for online business loans will remain constant. But when you pay down the principle, your interest will go down.

Benefits of Availing Online Business Loans

There are many uses for business loans online. There are several well-known advantages as well. Let’s talk about a few advantages of availing an online business loan.

Flexible and Effective

The quickest method to apply is to go for a business loan online. First, fill out the application, submit it, and then wait for some time for its acceptance. you do not need to provide a ton of documents at first. The use of digital verification of documentation is advisable wherever possible. It can save a lot of time.

No collateral

When you apply for a business loan online, you must offer collateral, which is a financial asset. Other types of business loans online need borrowers to put up an asset, like their home, as security. Online business loans are, but, unsecured. It implies that you may get money for your business right away.

Simple to get

Looking for investors and engaging in drawn-out conversations can be difficult. Obtaining a business loan online is simpler and more comfortable. Processing speed is especially beneficial when you need an emergency business loan online. Offline sources are not only slower but also more expensive.

Many choices and modifications

You have access to a sizable pool of moneylenders. There is a wide range of lending possibilities when you apply for a business loan online. There is no need to be under pressure to accept what they present to you. You can choose from a variety of possibilities.

Immediate transfer

When applying for a loan offline, the procedure gets lengthy and complex. But, when you apply online, the money comes into your bank account without any hassles. While waiting for funding, a firm does not have to stop operations. It does not have to put development plans on hold. Online business loans often need little paperwork and funds are available immediately.

Depending on the lender you select, you may receive the funds the same day you apply. It may otherwise come within 24 hours, or in a few business days.

Obtaining a business loan online is easy. Estimating the interest rate and calculating EMIs is also easy. It is a simple process with a business loan EMI calculator.

Here are some of the advantages of using a business loan EMI calculator

Simple to use

An online business loan EMI calculator is simple to use. Input your loan information, including the loan amount. Add the bank-provided business loan interest rate and the payback period. It spares you from all forms of difficulties while calculating. It is an instrument for the common man.

Time-saving

Using a business loan EMI calculator may save you a lot of time. Using a mathematical method will take a longer time. The quickness of a business loan EMI calculator is unbeatable. Even a standard calculator cannot beat it.

Evaluating your finances

Plan your finances. It is the most important aspect when applying for a business loan online. You must complete a series of computations. Keep yourself informed of the debt status to achieve that. Before applying for an online business loan, you can try many things. Attempt several combinations and permutations for the loan amount, rate, and term. This will enable you to calculate your EMI for several alternatives.

Accuracy

The results the business loan EMI calculator gives you are 100% correct. Thanks to artificial intelligence for creating the outcomes, they are exact and faultless.

Contrasting various alternatives

The calculator assists you in figuring out the business loan EMI for the loan you have applied for. It also allows you to compare the many loan alternatives you have.

How to Use a Business Loan EMI Calculator?

You can apply for business loans online even if you don’t understand how to use an EMI calculator. You should be able to do so by following the instructions listed below.

1. Enter the loan amount you wish to avail

2. Then, enter the interest rate by your lender

3. Input the loan payback period you have chosen. You may input this in months or years.

4. The EMI for the business loan will show on your screen. Also, it will display the total interest you need to pay for the loan’s duration.

Conclusion

A company loan may provide you with the needed financial leverage. Yet, you must also pay attention to your payback plan. You should use a business loan EMI calculator to better manage your EMI payments. You may determine your monthly installment amount using our convenient online tool. You may use it to analyze the many loan alternatives available to you. You can select the best one while using it to calculate your EMIs for the loan you have already applied for. Visit FlexiLoans if you’d like to learn more about a business loan EMI calculator or use one of them.

The post The Advantages of a Business Loan EMI Calculator: Simplicity and Accuracy appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

The Role of Current Assets in Working Capital Management

admin — Wed, 09 Aug 2023 09:36:00 +0000

Overview:

Working capital is like the energy that keeps a company running every day. The working capital formula includes the money needed to keep everything moving. Think of it as a balance between what a business owns and what it owes right now. A company facing a shortage of working capital may seek help from investment bankers. It may secure a from a financial institution.

Current assets are a big part of this balance. They work like a financial safety net for businesses. They help companies manage sudden expenses, seize opportunities, and ensure smooth operations. Let’s focus on the key component of the working capital formula: “current assets.”

What are Current Assets?

Current assets are the assets that you can convert into cash within a year. This could be because you sell them, use them up, or they are part of your regular business operations. Think about the products you have in your store that you will sell soon or the money that your customers owe you. These are all current assets.

To understand how your business is doing, you look at something called the balance sheet. It’s like a financial photo that shows what you have (your assets) and how you got them (using loans or your own money). The balance sheet covers a specific time, usually a year.

On this balance sheet, is where you can locate your current assets right at the top. Why? Because they are the most liquid assets. We arrange these assets in a specific order, making it easier to turn them into cash when needed. This arrangement helps keep things organised. So, the more liquid the asset, the higher up on the list it goes.

What Can You Do with Current Assets?

Current assets are like your business’s handy toolkit. You need them to keep things moving. Here’s what you can do with these assets:

To Run Day to Day Operations:

You have got inventory to stock your shelves and make sure customers find what they want.
Paying employees is necessary.

To Invest in Your Business’s Future:

Upgrading your equipment or getting a new office space.

To Stay on Top of Bills and Loans:

To cover debt payments on time.

Types of Current Assets:

Let us take a look at the variety of current assets at hand:

Cash:
Cash is a main asset, at the top of your balance sheet. It includes local and foreign money. It also includes business checking accounts, payments, customer receipts, and on-hand cash.
Cash Equivalents:
Cash equivalents are not as liquid as cash itself. These assets stand as liquid reserves, convertible to cash at a moment’s notice. It includes marketable securities, short-term government bonds, treasury bills, and money market funds.
Accounts receivable:
Accounts receivable consist of customer debts to your business. These dues usually transform into cash within a year. So, they’re tagged as current assets. Let’s say your interior company crafts a custom cupboard. And, the payment is pending upon delivery. This owed sum finds its place in accounts receivable.

If a good or service’s conversion to cash extends beyond a year, it shifts into the long-term asset realm. Then, it departs from current assets.

Inventory:
Inventory blankets your raw materials and unsold merchandise. This encompasses items that generally sell within a year. Prudent inventory management is important. Overstocking risks obsolescence or expiry, especially for perishable goods. On the flip side, understocking translates to missed sales and irked customers.
Prepaid expenses:
Prepaid expenses see their spot on the balance sheet, led by prepaid insurance. This category embodies upfront insurance payments. Insurance premiums precede the coverage period and companies settle them within a year. Rent, too, can strut its stuff as a current asset. Paying rent ahead of schedule earmarks it as prepaid rent.

How to Calculate Current Assets?

Lay out your current assets on the balance sheet. Then, computing your total current assets is a breeze. Sum up all these elements.

Current Assets for Working Capital Formula:

Current assets help balance sheet analysis by calculating liquidity ratios. Ratios show asset-liability balance and financial health. Insights into fiscal well-being and capacity for financial commitments. Let’s take a look at a few familiar forms of liquidity ratios:

Ratio	Description	Formula
Current Ratio	Evaluates the proportion of current assets to current liabilities within a year.	Current Ratio = Current Assets / Current Liabilities
Quick Ratio	Assesses the capability to meet short-term financial obligations using liquid assets.	Quick Ratio = (Cash + Cash Equivalents + Marketable Securities + Accounts Receivable) / (Short-term Debt + Accounts Payable + Accrued Liabilities and Other Debts)
Net Working Capital	Provides insight into current liquidity, financial health, and efficiency.	Net Working Capital = Current Assets – Current Liabilities

FlexiLoans’ Working Capital Loans:

FlexiLoans cater to the financing needs of small and medium-sized enterprises (SMEs). It addresses the challenges they often encounter when seeking small business loans.

The advantages of opting for FlexiLoans Working Capital Loans are large:

Faster Processing: You can avail a working capital loan in three days. But, you must provide the fulfilled paperwork.
Ownership Retention: Quick and collateral-free access to credit.
Cash Flow Enhancement: operational continuity despite cash reserve shortages and fluctuations in sales.
Credit Score Improvement: There are some who can’t meet bank loans due to low credit scores. Flexiloans provides a chance to enhance credit scores. It reports business loan transactions to the Credit Bureau.

SMEs can thrive with FlexiLoans. They can overcome the hurdles that often hinder their growth. At Flexiloans we offer MSME Loans, Term Loan, Business Loan for Women, and to many more industries. Visit the Flexiloans website, today!

FAQs

Q. 1. What sets current assets apart from non-current assets?

Ans: Current assets are short-term. They can turn into cash within a year or cycle. Non-current assets are long-term, beyond a year or cycle.

Q. 2. How does working capital get affected by current assets?

Ans: Current assets include cash, accounts receivable, and inventory. Current liabilities encompass accounts payable, taxes, wages, and owed interest. Working capital arises from the difference between current assets and liabilities.

Q. 3. What else is working capital referred to as?

Ans: Working capital is also known as net working capital. The company considers capital for operations as circulating. It includes cash, expenses, materials, inventory, and receivables.

The post The Role of Current Assets in Working Capital Management appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

Working Capital Ratios: Assessing Financial Health and Efficiency

admin — Tue, 08 Aug 2023 09:43:00 +0000

Overview:

Net working capital plays a vital role in evaluating a company’s financial well-being. It represents the difference between the company’s current assets, such as cash, and its current liabilities, like bills and salaries.

Maintaining positive net working capital empowers the company to navigate challenges and invest in growth after fulfilling immediate obligations. This metric serves as a safety net during downturns and enables the pursuit of expansion opportunities.

What Is Working Capital — Meaning And Definition

Working capital is a measure of how well a company manages its money in the short term. Positive working capital indicates a company’s ability to cover immediate bills and debts. Conversely, negative working capital suggests struggles in meeting short-term obligations

CFOs and financial managers must watch ‘trailing net working capital,’ – a crucial measuring stick for financial health. If it’s going down over the past 12 months, quarters, or years, it’s not a good sign. It reflects that the company might not have enough cash and could run into financial trouble.

Working capital isn’t just important for entrepreneurs – investors and managers care a lot about it too. For investors, it helps them figure out if a company can survive when things get tough financially. And for the big bosses, it helps them see ahead and spot any money problems that might pop up. To sum it all up, having enough working capital is crucial for a company. It’s like having spare money in case things get tricky.

How To Calculate Net Working Capital?

To calculate the net working capital, you just subtract the total current liabilities from the total current assets. This helps the business know if it has enough money to cover its short-term needs.

So, the working capital formula is:

Working capital = What you own (Current assets) – What you owe (Current liabilities)

Current assets: Money you’ll receive from customers and money currently in hand.

Current liabilities: Debts to be paid to suppliers and others.

Understanding The Building Blocks Of Working Capital

Working capital, a critical financial concept, consists of two essential components:

1. Current Assets:

These are the valuable resources a company possesses that can be quickly turned into cash within a year or a single business cycle. Consider items like cash in the bank, easily sellable investments such as stocks and bonds, money owed by others, and short-term prepaid expenses. Essentially, anything that holds the potential to transform into cash relatively swiftly falls under this category.

2. Current Liabilities:

In contrast, this pertains to the financial obligations a company is accountable for and the expenses it needs to settle within a year or a business cycle. It encompasses items like rent payments, utility bills, debts that must be repaid, and impending tax payments. Essentially, any financial responsibility that requires prompt action and payment belongs to this category.

The relationship between current assets and current liabilities is important. The goal is to ensure that the value of current assets surpasses the value of current liabilities. In simpler terms, the resources available should be sufficient to comfortably meet short-term financial obligations and operational needs.

To break it down further:

Current Assets:

Cash and cash equivalents
Prepaid Expenses
Accounts Receivable
Marketable Securities
Current Liabilities
Other Liquid Assets

Current Liabilities:

Notes payable
Accounts Payable
Accrued Liabilities
Current Portion of Long-Term Debt
Unearned Revenues

Now, let’s look at some important terms:

1. Days Sales Outstanding (DSO): This is how long, on average, your customers take to pay their bills. A shorter DSO means customers pay you faster.

2. Days Payables Outstanding (DPO): This is how long, on average, you take to pay your suppliers. A longer DPO means you are holding onto your money for a bit longer.

3. Days Inventory Outstanding (DIO): This shows how quickly you sell your inventory or stock. If this number is smaller, it’s better – it means you are selling things faster.

4. Cash Conversion Cycle (CCC): This is the time it takes to turn your invested money in inventory back into cash. The formula for CCC is DIO + DSO – DPO.

A shorter CCC is great because it means you are changing inventory into cash faster. And there are three ways companies can do this:

Ask customers to pay quicker (shorter DSO).
Extend the time to pay suppliers (longer DPO).
Reduce the time they hold onto inventory (shorter DIO).

The Importance Of Working Capital for Your Business

No matter how big or small your business is, working capital is super important. Here’s why it’s so good for your business:

Keeps Things Running Smoothly: Working capital helps things go smoothly in your business. It keeps the production moving without any hitches.
Boosts Money Flow: It’s like a boost for your money. Working capital makes sure you have enough cash to handle your day-to-day stuff.
Handles Fixed Assets Right: It’s not just about cash – it also helps you take care of durable assets you own, like machines and buildings.
Makes Your Business Look Good: Having good working capital makes your business look awesome. People think your business is doing well.
Gets You Discounts With working capital: you can avail better discounts. Suppliers might give you a deal if they see you are doing well financially.
Makes Borrowing Easy: Need a working capital loan? Working capital makes it easier to get loans from banks. They see you are good at handling money.
Handles Surprises: Life can throw surprises, even for businesses. Working capital helps you tackle unexpected things without freaking out.

Types Of Working Capital:

Here’s a concise breakdown of types of working capital:

Gross Working Capital: This is the total of short-term assets, excluding liabilities.
Net Working Capital: It’s assets minus liabilities, indicating operational strength.
Permanent Working Capital: The minimum needed for ongoing functions.
Regular Working Capital: For everyday operations, like salaries and raw materials.
Reserve Margin Working Capital: Kept for unexpected events, part of permanent capital.
Variable Working Capital: Temporary funds, split into seasonal and special needs.
Seasonal Variable: Copes with spikes in expenses, like festive or high-demand times.
Special Variable: Reserved for specific purposes or unforeseen events.
Negative Working Capital: When liabilities exceed assets, causing a deficit.

Working Capital Ratio- Assessing Financial Health

Evaluating the financial health and efficiency of your company holds great significance. You can assess the financial health by examining the “working capital ratio.” The working capital ratio shows if a business can handle its bills.

So, it’s a measuring tool for how well the company can handle its short-term obligations. If the ratio is lower than 1, it’s like a warning sign that the company might not have enough working capital. But if it’s above 2, it suggests the company might not be using its extra money wisely. The best range is usually between 1.2 and 2.0. Another name for working capital is “net working capital.”

Ratio Analysis: Techniques To Analyse Working Capital

There are various methods to conduct a working capital analysis, but we will be focusing on ratio analysis under this segment:

Ratio Analysis:

This is a straightforward arithmetic display of the relationship between numerals. It measures the short-term liquidity of the firm a.k.a a simple way of seeing how well a company can turn its stuff into cash to cover its bills right away.

Liquidity Ratios:	Description	Formulas
Current ratio	Current Assets/ Current Liabilities	The current ratio helps you see if a company can handle its short-term debts (those due within a year) using its current assets like cash, money owed by others, and goods it plans to sell. If the ratio is high, it’s a sign the company is in a good spot with its available money and stuff—it’s more likely to be able to pay its debts without a hitch.
Acid Test Ratio/ Quick Ratio	Quick ratio= CLC+MS+AR where:C=cash & cash equivalentsMS=marketable securitiesAR=accounts receivableCL=current liabilities	The quick ratio shows how well a company can handle its immediate bills using its super liquid assets. These are the things that can quickly turn into cash, like actual cash, money others owe, and investments that can be easily sold.It’s called the “quick” ratio because it gives you a speedy picture of the company’s ability to pay off its short-term obligations. Unlike the current ratio, it doesn’t include the goods the company plans to sell. Another name for this ratio is the “acid-test” ratio.
Cash Position Ratio/ Absolute Liquid Ratio	[(cash & Bank) + short-term securities]/Current Liabilities	This ratio includes the actual cash a company has, the money stored in its bank accounts, and temporary investments like things it can easily sell, such as marketable securities. A good target for this ratio is around 50 per cent. This helps ensure the company has a balanced amount of easily accessible funds to cover its short-term debts.

Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory at Cost

Ratio	Alternatives	Formula
Inventory Turnover Ratio	If you are not sure about the cost of goods sold, there are other formulas you can use to get insights.	Cost of Goods Sold/Average Inventory at Cost
		Net Sales/Average Inventory at Cost
		Cost of Goods Sold / Average Inventory at Selling Price

FlexiLoans’ Working Capital Loans:

The purpose of designing these components is to fulfil the financing requirements of small and medium-sized enterprises (SMEs). Challenges faced by SMEs in obtaining small business loans due to limited credit history, collateral requirements, and lengthy approval processes are efficiently tackled through our online platform.

Benefits of Flexiloans Working Capital Loans:

Faster processing: You can acquire a working capital loan within three days with the necessary paperwork.
Keeping your ownership: These working capital loans offer fast and straightforward access to credit without requiring collateral.
Increases your cash flow: The loans let you operate regularly, regardless of cash shortages and fluctuations in sales.
Boost your credit score: If your company’s bank loan application doesn’t make it due to a low credit score, Flexiloans may help by reporting your loan activities to the Credit Bureau, potentially aiding in the enhancement of your credit score.

Visit our website to empower your business with FlexiLoans’ Working Capital Loans.

FAQs:

Q. 1 What effect does the sale of fixed assets have on working capital?

Ans: Selling fixed assets can indeed affect working capital by boosting cash reserves. However, it’s crucial to know — if essential assets, such as production machinery are liquidated, it might lead to decreased operational efficiency, hindering the company’s ability to generate revenue.

Q. 2 How does acquiring fixed assets affect current assets?

Ans: Acquiring fixed assets may temporarily reduce current assets, particularly cash or short-term investments used for the purchase. However, if the acquired assets improve productivity or generate higher returns, it can positively influence long-term profitability and overall asset base. Careful assessment of the trade-off between current and fixed assets is essential.

Q. 3 What does a current ratio below 1 indicate?

Ans: A current ratio below 1 suggests that the business might struggle to meet expenses on time, posing a risk that investors consider.

Q. 4 What characterizes a working capital loan?

Ans: A working capital loan serves the purpose of addressing short-term business requirements like cash flow, inventory, and operating expenses. It offers swift and convenient funding access without requiring collateral, making it a suitable choice for MSMEs.

The post Working Capital Ratios: Assessing Financial Health and Efficiency appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

Complete Form, Scheme, Loan, and Online Application of PMRY

admin — Wed, 12 Jul 2023 05:39:00 +0000

Everything You Need to Know About Pradhan Mantri Rozgar Yojana

Meta title: Learn all about Pradhan Mantri Rozgar Yojana

Meta description: Pradhan Mantri Rozgar Yojana (PMRY) has been supporting India’s economic growth for decades. Read on to learn about the scheme and its benefits.

India is home to one of the youngest populations in the world, but the rising unemployment figures are an alarming factor. The right schemes and interventions from the government can help create more jobs for people, which is why the creation of new policies is important.

With an evergrowing population, India has been struggling with prevalent unemployment, especially among its educated youth. To harness its most valuable asset for economic growth, the government launched a historic scheme in 1993 to promote skill-based self-employment generation – Pradhan Mantri Rozgar Yojana or PMRY.

What is PMRY?

The full form of PMRY is Pradhan Mantri Rozgar Yojana, and it focuses on helping unemployed youth start small businesses. The Indian government launched the scheme to provide subsidised financial assistance to unemployed youth and women that can help them start their businesses in the manufacturing, service, and trading sectors.

The PMRY programme was originally aimed to benefit more than 1 million trained unemployed youth and women over two years and six months. However, the government decided to turn it into a permanent scheme upon witnessing its successful implementation and favourable outcome.

Over the years, the scheme has undergone many amendments and evolved to complement the changing unemployment landscape in India. Even after all these changes, the objectives remain the same – providing financial assistance for individuals to set up businesses and incentivising employers to generate employment. Read about PMRY’s objectives, benefits, and amendments in detail below.

Objectives of PMRY

The government developed the Pradhan Mantri Rozgar Yojana (PMRY) to combat widespread youth unemployment. However, with the shift in the country’s economic landscape, the scheme’s objectives have evolved. Let’s delve deeper into the specific objectives of this scheme:

Encourage Self-Employment: Pradhan Mantri Rozgar Yojana (PMRY) aims to encourage entrepreneurship and self-sustenance by providing financial support for those looking to set up small businesses. The scheme’s aim is to promote alternative methods of livelihood when jobs in the market remain limited and irregular. By disbursing loans at subsidised rates, this scheme encourages educated youth to transform their small business ideas into sustainable sources of income.

For example, if you are unable to secure a regular job but have a passion for handicrafts, you can apply for assistance as per the PMRY loan limits to start your journey. It will not only be a source of income for yourself but it also creates employment opportunities for others.
Create Job Opportunities: This scheme has the objective of dual employment generation. As per the PMRY loan eligibility criteria, you can gain access to financial assistance and create a job opportunity for yourself. Also by doing so, you can generate employment for the community.

For example, if you have used financial assistance from Pradhan Mantri Rozgar Yojana to start a small handicrafts and artwork business and, in the process, you hire local workers to scale up your operations, you have not only ensured your income flow but also boosted the economy by creating jobs and solving the problem of unemployment at a smaller level.
Boost Income Levels: PMRY aims to improve the economic condition of individuals by promoting self-reliance as a means of earning a livelihood. This boosts the family’s income level, breaking the cycle of unemployment and poverty.

Say your handicrafts business scales up as a result of receiving financial assistance under the scheme; this will ensure your financial stability and improve the standard of living of the people who work for you. This boost in income at an individual level will ultimately contribute to the overall economic growth.
Promote Women’s Entrepreneurship: Pradhan Mantri Rozgar Yojana (PMRY) recognises the need to uplift the status of women in society by involving them in the process of nation-building and economic growth. It offers special assistance to women entrepreneurs in terms of reserved application spots, a simplified selection process, and subsidised rates of assistance.

By fostering and empowering women entrepreneurs, this scheme aims to create a sustainable and inclusive ecosystem to nurture entrepreneurship, promote self-reliance and build an enabling environment to create more jobs and eliminate gender-based discrimination in India.

Features of PMRY

If you are exploring PMRY loan eligibility, let’s first understand the notable features of this relief scheme.

Financial Assistance: Under this scheme, you can avail financial assistance for all economically viable business activities. Assistance is available for all types of industrial, business, and service ventures. Furthermore, an amendment to the scheme has brought agriculture and related activities within the scope of the assistance provided, excluding direct agricultural activities such as arable farming, purchase of fertilisers or soil improvers, and such.
Loan Limit: The central government promotes Pradhan Mantri Rozgar Yojana in both urban and rural areas. According to recent amendments to the scheme, here are the PMRY loan limits.

Sector	Maximum Prescribed Limit
Business	INR 1 lakh
Service	INR 2 lakhs
Industrial	INR 2 lakhs
Partnerships	INR 10 lakhs

Collateral: If your project costs below or up to INR 1 lakh, there is no collateral requirement. The government has extended this exemption to partnership projects where the exemption limit applies per partner in the project. For projects approved in small-scale industries (SSI), the collateral exemption limit is INR 5 lakhs.
Subsidy and Margin Money: The grant is restricted to 15% of the total project cost, with a ceiling of INR 7,500 per entrepreneur. Also, the lending institution can charge a percentage sum of margin money, ranging from 5% to 16.25% of the project cost.
Rate of Interest: No specific interest rate prevails under the scheme, which means that lenders will charge a normal interest rate according to your PMRY loan limit.
Repayment: Once an individual sets up a business and starts commercial operations, they must start repaying the loan and the interest applicable. The repayment period ranges between three and seven years under the scheme. After analysing the project, your PMRY loan eligibility, and other related factors, the lender will determine the repayment period for your specific case.
Skill Development: You will receive 15 to 20 days of training to help you set up your business. The ceiling amount for training and operating costs is INR 2,000 per case.
Implementation and Evaluation: The Development Commissioner for Small-Scale Industries (DCSSI) of the Ministry of Small, Rural and Agricultural Industries heads the PMRY scheme. Implementation occurs at the state level through the Small Industries Service Institute (SISI), which has 30 branches across major Indian cities. DCSSI has set up a special unit to monitor, evaluate and accordingly amend the scheme.

Now that you have understood the features governing the PMRY loan limits, it’s important to understand the qualification standards or PMRY loan eligibility.

What is PMRY Eligibility?

PMRY’s main intention is to bridge the socioeconomic gap and reduce unemployment in the country. To ensure that this scheme reaches its target beneficiaries and to protect the limited resources of the scheme, the government has specified certain conditions. In case you wish to enjoy the benefits under this scheme, consider these parameters to check your PMRY loan eligibility.

Age Limit: The basic PMRY loan eligibility criteria is the age limit, which includes two categories for educated and unemployed people.

Category	Limit
Standard age limit	18-35 years
Women, SC/STs, ex-servicemen, and the physically handicapped	18-45 years

Educational Qualification: Those who have cleared Class 8 from a recognised educational institute are eligible under this scheme. The government gives particular preference to applicants who have completed at least six months of training at a recognised institution.
Family Income: At the time of application, the income of the applicant, along with those of their spouse and parents, should not exceed INR 40,000 per month.
Residence. As a criterion for PMRY loan eligibility, you should be a permanent resident of the area from which you have applied for the scheme for at least the previous three years.
Defaults: You should not have defaulted in the repayment of any credit or scheme benefits to a bank or financial institution. Policy exclusion will occur from this scheme if you have already received support under other subsidy-linked government schemes.
Reservation: PMRY ensures special preference for women as well as the weaker sections of society. There is a 22.5% reservation for Scheduled Castes and Scheduled Tribes (SC/ST), and 27% for Other Backward Classes (OBCs).
Entrepreneurial Talent: One of the key factors in determining PMRY loan eligibility is the individual’s intent to set up a business and create jobs. While interviewing an applicant, the task force will look at their ability to create a sustainable livelihood through self-employment.

Banks and District Industries Centres (DICs), which have been set up by the government to provide the necessary services and support for entrepreneurs looking to set up micro, small and medium enterprises (MSMEs), will analyse your application to ensure you meet all the requirements for PMRY loan eligibility before giving approval. They may provide exceptions on a case-by-case basis.

How to Apply for PMRY

Here’s a quick guide on applying for the scheme:

The first and most important step is to finalise your project idea, based on which you have to prepare a detailed project report. An ideal project report should contain the following:

Value of fixed assets
Raw materials required
Estimated expenditures such as rent, salaries, and more.
Projected sales, profits, breakeven analyses, and profitability ratios
Repayment schedules
A market study of the proposed venture.
1. Applicants can find the application form on the official website of Pradhan Mantri Rozgar Yojana here: https://dcmsme.gov.in/publications/forms/pmryform.html. Download the form, and fill in the details along with the required documents.
2. The applicant must submit the completed application form to the local DIC or the nearest bank. The DIC/bank will review your application and invite you to an interview, which the PMRY task force will conduct.
3. Once you receive approval, you will receive an intimation letter of selection and allotment from the designated lender. You can discuss the viability of your project with the allotted lender and make the necessary alterations to the business plan.
4. As part of the selection process, you will receive training under the scheme’s guidelines. You must submit the certificate of completion to the bank to receive the funds.
5. As a final step, the DIC/bank extends its support in grounding the approved project. Before commencing operations, you may have to take relevant approvals and clearances from bodies like local municipal committees, the panchayat, the pollution control board, or tax authorities. You can check with your local DIC to get assistance with these clearances.

What are the Documents Required for PMRY Application?

You must submit the duly completed application form to the local DIC or bank together with certified copies of the following documents:

Proof of date of birth (state secondary certificate (SSC) or a transfer certificate (TC) from your school)
Certificate of academic and technical qualifications
Ration card or any other proof of residency that states you have been a resident of that area for more than three years
Experience certificate, if any
Income certificate issued by the mandal revenue officer (MRO) of the concerned mandal or administrative division
Caste certificate issued by the MRO, if applicable
Driving licence in case of candidates applying for motor vehicles
Copy of the proposed project report
Passport-size photographs
Training certificate
Any other specific document required by the DIC/lender.

Why PMRY is the Need of the Hour

The government introduced Pradhan Mantri Rozgar Yojana as a pioneering step towards creating a level playing field for educated youth in India. Through features like repayment flexibility, skill development opportunities, and uplifting weaker sections, the scheme helps build a conducive context for able entrepreneurs who find it difficult to secure appropriate jobs.

Depending on the requirements and prevalent conditions, the government keeps modifying PMRY for the benefit of the intended beneficiaries. You will need to stay updated with all the recent developments in the scheme if you wish to apply for the assistance provided. You can reach out to the experts at FlexiLoans to stay updated and understand the technicalities of this incredible scheme.

About FlexiLoans

At FlexiLoans, we understand the importance of financial assistance for fulfilling your dreams especially when it is hard to secure funding. Our flexible solutions and simplified application process make it easy for you to start your MSME journey. We offer , term loan, , and more. Visit our website to learn more about our loan terms and conditions, and take the next step towards self-reliance. Check out our business loan calculator, , and business loan eligibility criteria.

Frequently Asked Questions

Q. 1 When was PMRY started?

Ans: PMRY, or Pradhan Mantri Rozgar Yojana, was set up by the Indian government on 15 August 1993. It was later launched on 2 October 1993 across the entire country.

Q. 2 When can I apply for the PMRY scheme?

Ans: You can apply for PMRY at any time during the year, although it is advisable to apply between the months of April and June. You can download the application form from the scheme’s online portal.

Q. 3 Can I avail of the benefits of PMRY in addition to other subsidies?

Ans: Unfortunately, you cannot apply for the PMRY scheme if you have already availed of any other government-sponsored subsidy or initiative.

Q. 4 Are there any processing charges for a PMRY loan?

Ans: No, there are no processing or hidden charges in a PMRY loan. However, lenders can charge a sum of margin anywhere between 5% to 16.25% of the total project cost.

Q. 5 What are the PMRY loan eligibility criteria?

Ans: The government has specified PMRY loan eligibility criteria to apply for financial assistance. A person aged between 18-35 who has cleared Class 8 (or metric pass) and has a gross total family income of less than INR 40,000 per month can apply for this scheme. Furthermore, such a person should have been a resident of the area from which they are applying for at least three years. However, there are certain exceptions provided for in the scheme’s guidelines on a case-by-case basis.

Q. 6 How does PMRY benefit the weaker sections of society?

Ans: This government scheme has specific reservation levels for women as well as the weaker sections of society. There is a 22.5% reservation for Scheduled Caste/Scheduled Tribes (SC/ST) and 27% for Other Backward Classes (OBCs).

If, in any particular instance, SC/ST/OBC candidates are not available, the state government has the autonomy to consider candidates from other categories.

Q. 7 What are the prerequisites before commencing a project under PMRY?

Ans: Before starting a project under this scheme, you will have to:

Deposit the margin money with the bank
Seek permission from the applicable local body (municipality or the panchayat)
Deposit the applicable collateral security
Seek clearance from the Pollution Control Board for your enterprise, if required
Apply for necessary tax registrations like Goods and Service Tax (GST) and income tax
Check if you need other business registrations like MSME registration, and Shops and Establishment Certificates
Register with a District Industries Centre (DIC) to avail of state government incentives.

Q.8 Since its introduction, what changes has the government made to Pradhan Mantri Rozgar Yojana?

Ans: Here are some of the amendments the government has made to this scheme:

The upper age limit for applicants from the northeastern states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim is now 40 years.
The minimum education qualification requirement has been brought down from Class 10 to Class 8.
The higher limit for the cost of a project is now INR 2 lakhs, which was previously INR 1 lakh.
The government has revised the PMRY loan limits over the years.

Check out more Government Schemes

The post Complete Form, Scheme, Loan, and Online Application of PMRY appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

SIDBI Schemes – Full Form, Functions, and Loan Application Steps

admin — Tue, 11 Jul 2023 09:13:00 +0000

Micro, small, and medium enterprises (MSMEs play a crucial role in the Indian economy. They contribute significantly to employment generation, innovation, and overall economic growth. However, they often face numerous challenges that hinder their sustainability and growth.
Access to funds continues to be a significant challenge for small businesses in the country. A survey by the Ministry of Micro, Small and Medium Enterprises (M/o MSME) revealed that about 56% of MSMEs lack access to formal credit. Limited financial resources make it difficult for these enterprises to invest in technology upgradation, research and development, and market expansion.
Another significant challenge is the lack of skilled workforce. Many MSMEs struggle to attract and retain skilled employees due to competition from larger companies and inadequate training facilities. This affects their productivity and efficiency.
Infrastructure deficiencies also pose challenges for small companies. Furthermore, inadequate transportation facilities, power shortages, and limited access to industrial parks or specialised zones impede their operations and increase costs. SIDBI came into existence to address these challenges and is playing a pivotal role in the economy.

What is SIDBI?

Small Industries Development Bank of India, the full form of SIDBI, is the principal financial institution for developing, promoting, and financing the country’s MSME sector. The government established the bank on April 2 1990 as a wholly-owned subsidiary of Industrial Development Bank of India. SIDBI delinked from IDBI on March 27 2000 and has headquarters in Lucknow and offices all over the country.

SIDBI’s mission is to facilitate and strengthen credit flow to firms as well as address financial and developmental gaps in the MSME ecosystem. One of the key objectives of SIDBI is to establish itself as a unified platform that addresses the developmental and economic requirements of the MSME sector, aiming to strengthen it, foster vitality, and enhance its global competitiveness.

To date, the bank has supported more than 450 lakh enterprises, created more than 1,200 lakh jobs, and contributed more than 7% to the country’s GDP.

SIDBI Functions and Objectives

The bank performs various functions to fulfil its mission. These include:

Promotion and Development: SIDBI promotes and develops the MSME sector by providing non-financial assistance. These include technology upgradation and marketing support, as well as the development of skills, enterprises, and clusters. It also undertakes research and advocacy activities to create a conducive policy environment for MSMEs.
Venture Capital Funds: The bank supports entrepreneurship and innovation by investing in venture capital funds. These funds finance emerging startups in various sectors. It also manages certain government schemes that provide equity support to startups.
Direct Financing: SIDBI directly finances MSMEs by offering innovative and customised lending products. These products address the specific needs and gaps of MSMEs. Some of the direct finance products provided include service sector financing, receivables support, risk capital, and sustainable funding.
Indirect Financing: The bank provides indirect financing to MSMEs by offering refinancing for banks, financial institutions, microfinance institutions, and fintechs that lend to MSMEs. This helps to increase the availability and affordability of credit for MSMEs.
Facilitation: Another SIDBI function involves facilitating the MSME sector by coordinating with various stakeholders such as government ministries, regulators, industry associations, academic institutions, and other financial institutions. The bank also serves as a nodal or implementing agency for various government schemes that benefit MSMEs.
Green Environment: SIDBI aims to support national plans on climate change. The bank contributes to mitigating greenhouse gas emissions and adaptation to climate change impacts by promoting projects based on renewable energy, green financing, waste management, and resource efficiency among MSMEs. It also implements various schemes and projects under the National Action Plan on Climate Change.

SIDBI Schemes Involving Direct Financing

Under direct financing, the bank offers the following 15 schemes:

1. Express 2.0

This SIDBI scheme aims to offer a swift approval process through an automated platform for MSMEs seeking term loans. It is exclusively for new customers in the manufacturing and service sectors that wish to acquire machinery or equipment. The loan amount is up to Rs. 1 crore, and the tenure is up to five years. The interest rate links to the Marginal Cost of Funds Based Lending Rate (MCLR).

Eligibility Criteria:

You must possess Udyam and GST registrations.
Your business must have a minimum operational history of three years.

2. SAATH

SAATH stands for SIDBI Assistance & Aid for Thematic Support to MSMEs promoted by SC/STs. This scheme offers loan assistance on relatively softer terms for establishing new or greenfield units, or expanding or modernising existing units. The loan amount ranges from Rs. 25 lakhs to Rs. 300 lakhs. Under this scheme, SIDBI bears 50% of the credit guarantee fees. In addition, SAATH has nil prepayment charges and is well-known for quick disbursement.

Eligibility Criteria:

The promoters of the firm must belong to the SC/ST category and must possess a minimum stake of 51% in the company.
The applying firm should not have any default record with banks and financial institutions.
The company must be registered under the provisions of the MSME Act.

3. ARJANA

This SIDBI scheme is for MSMEs operating in the service and manufacturing sectors with women entrepreneurs. This loan’s minimum and maximum disbursement rates are Rs. 25 lakhs and Rs. 300 lakhs respectively.

Eligibility Criteria:

Business registration must be as per the MSME Act.
The woman entrepreneur should have a 51% stake at minimum in the company.
The company must clear a due diligence check conducted by Credit Information Bureau India Limited (CIBIL).
The company must not have any default record with banks and financial institutions.

4. STEP

STEP stands for SIDBI Term Loan to Enhance Production of MSMEs. This facility assists in helping a company meet its working capital requirements and ensuring it can easily execute confirmed orders. This scheme is also designed to help augment the net working capital (NWC) of such firms. STEP offers loans of up to Rs. 200 lakhs to new customers and up to Rs. 300 lakhs to existing customers.

STEP is well-known for its quick sanctioning, usually completed within two days, as well as its zero processing fees. The repayment tenure is three years, which includes a six-month moratorium period.

Eligibility Criteria:

New applicants must have been operating their business for at least three years while existing customers must have a minimum operational history of two years.
Micro enterprises applying for the loan must demonstrate a profit in the last two financial years. On the other hand, existing customers should have maintained a profitable business for at least one year.
There must be no records of debt default.

5. Ubharte Sitaare

This SIDBI scheme targets MSMEs that have the potential to become export champions. The sanctioned funds are accessible for land, building, and advanced machinery investments, ultimately facilitating modernisation, capacity upgrades, and diversification. Under this scheme, the maximum funding available is up to 80% of the original project cost, which means you can classify it as need-based funding. The repayment tenure generally lasts up to six years, which is extendable up to 10 years and includes a moratorium of up to two years.

SIDBI offers this loan without requiring a joint partnership with Export-Import Bank of India (India Exim Bank). Some of the sectors eligible under the Ubharte Sitaare scheme are:

Chemicals
Aerospace and defence
Pharmaceuticals
Automobiles
Food processing
Precision engineering
IT and Information Technology Enabled Services (ITES)
Textiles and allied sectors.
Eligibility Criteria:
- For new units, the company’s promoters must have sufficient experience in the relevant industry as well as demonstrate major projected revenue from exports. However, for units co-funded by entrepreneurs from reputed institutions such as IIT, IIM, IISc and NIT, sufficient industry experience is not a requirement.
- For existing units, the scheme requires fundamentally strong export-oriented MSMEs with satisfactory financial performances.
- The company should clear a due diligence check conducted by CIBIL.
- The promoters’ stake in the company needs to be 20%, which increases to 30% for greenfield units.

6. STHAPAN

STHAPAN stands for SIDBI Thematic Assistance for Purchase of Capital Assets in New Enterprises. It offers monetary support to greenfield units to assist them in establishing and expanding new units. The funds are available for investment in land and equipment, as well as the construction of new factory buildings.

STHAPAN provides maximum funding of up to Rs. 2,000 lakhs or 75% of the project cost, whichever is lower. The applicable interest rate for the first year is 2.20%-3.50% and links to the repurchase (repo) rate. Subsequently, the rates adjust based on the internal rating. The repayment tenure is seven years, including a moratorium of up to two years.

Eligibility Criteria:

The MSME should have been in operation for at least five years.
The firm must have a consistent history of generating profits and maintaining stable sales. The promoters’ contribution to the company should be a minimum of 25%.
The company must successfully pass the standard diligence check norms by CIBIL, such as the CIBIL MSME Rank (CMR).

7. ARISE

ARISE, which stands for Assistance to Re-Energize Capital Investments by SMEs, offers two types of facilities: foreign currency and regular-term loans. This SIDBI scheme’s maximum loan amount is Rs. 700 lakhs or 80% of the project, whichever is lower. The applicable interest rate ranges from 1.70%-3.00% plus the repo rate from the first year. From the following year onwards, the internal rating system adjusts the rates. The repayment period for ARISE loans is seven years, which includes a two-year moratorium.

Eligibility Criteria:

The firm must have been operational for at least two years.
The company’s audited financials must display its cash profits.
The contribution from the promoter should be at least 25%.

8. STAR

STAR, which stands for SIDBI Term Loan Assistance for Rooftop Solar PV Plants, assists MSMEs in reducing their electricity bills. The minimum and maximum funding available under this SIDBI scheme is Rs. 10 lakhs and Rs. 350 lakhs respectively. STAR offers attractive features such as 100% financing, direct payment to the supplier, and an interest-bearing fixed deposit of 15%-25% of the loan amount. The repayment term for the STAR scheme is 60 months, which includes a moratorium period of 6-12 months.

Eligibility Criteria:

For new customers, the firm must have a minimum of three years of operational history. However, existing customers only need a minimum of two years of operational history.
The business must demonstrate a profit for at least two years.
The proposed capacity should not exceed the connected load level.
The maximum funding available will be 25% of the company’s net sales.

9. TULIP

TULIP, which stands for Top Up Loan for Immediate Purposes, is a scheme that aims to assist companies in meeting their urgent financial needs. TULIP offers 100% financing, but its availability depends on a 10% fixed deposit (FD) and the extension of this charge. One noteworthy aspect of this product is that it does not require collateral other than the FD. The repayment tenure of this SIDBI scheme is five years, which includes a moratorium of six months.

Eligibility Criteria:

Since this is a top-up loan, at least 1 year of association with SIDBI is necessary.
The loan purpose should relate to the same business line.
The company must demonstrate at least one year of profitability.

10. Speed

SPEED, which is an abbreviation for SIDBI Loan for Purchase of Equipment for Enterprise’s Development, allows new units to purchase machinery from original equipment manufacturers (OEMs) that have signed a memorandum of understanding (MoU) with SIDBI. Existing customers of the bank have the flexibility to make purchases from any OEM.

For new units, the funding assistance provided is 100% of the machinery cost or Rs. 1 crore, whichever amount is lower. On the other hand, existing customers have a higher ceiling of Rs. 2 crores. The repayment tenure for SPEED ranges from two to five years, which includes a moratorium period of up to six months.

Eligibility Criteria:

The company must have been operational for at least three years.
The firm must demonstrate cash profits for the previous two years.

11. Speed Plus

This SIDBI scheme aims to assist MSMEs in purchasing machinery directly from OEMs. The funding assistance for new borrowers is set at 100% loan-to-value of the machinery cost as long as the purchase amount is up to Rs. 2 crores. For existing customers, this amount increases to Rs. 3 crores. However, the actual disbursements may be lower if the applying company has a lower repayment capacity.

The interest rate for Speed Plus depends on the MCLR. The repayment tenure is seven years, including a 6-12 month moratorium.

Eligibility Criteria:

The applying unit must have been in operation for at least five years.
The firm must be able to demonstrate cash profits for the past three years.
The firm’s minimum net sales for the past two years should amount to Rs. 5 crores, without any operating loss.

12. PRATHAM

PRATHAM stands for Priority Assistance to MSMEs Based on Hybrid or Alternate Security Model. MSMEs can choose to opt for this SIDBI scheme to purchase machinery, buy ancillary equipment, and refurbish machines. Additionally, ineligible machines under the Speed Plus and Speed schemes also qualify under the PRATHAM scheme.

The maximum funding available is 10% of the machinery cost or Rs. 300 lakhs, whichever is lower. However, this funding amount depends on 30-40% of the FD provided. The interest rate is MCLR-linked and the repayment tenure is five years, including a moratorium period of 6-12 months.

Eligibility Criteria:

The MSME must have been operational for at least three years.
The firm should have recorded cash or net profits in the previous three years.

13. Working Capital

This SIDBI scheme is exclusively available to MSMEs with an outstanding term loan with the bank or who have submitted a proposal to obtain a term loan. The loan offers firms an immediate cash infusion to support their business operations, enabling them to fulfil their day-to-day expenses.

Eligibility Criteria:

The firm must have a current ratio of 1.25.
The overall asset coverage ratio requirement is set at 1.3 for existing units and 1.4 for new projects.
There should be a minimum interest coverage ratio of 1.5.

14. SMILE

SMILE stands for SIDBI Make in India Soft Loan Fund for Micro, Small and Medium Enterprises. This scheme provides financial assistance to 25 target sectors, enabling them to invest in growth opportunities. These sectors include aviation, construction, railways, pharmaceuticals, textiles and garments, and roads and highways.

Under the SMILE scheme, funds are available in two types; the first is a soft loan, provided in the form of quasi-equity. The second type is a term loan, which is available on relatively soft terms.

The minimum funding available under the soft loan is Rs. 10 lakhs for equipment purchase and Rs. 25 lakhs for other purposes. In contrast, for the term loan, the minimum funding for new customers is Rs. 50 lakhs, while for existing customers, it is Rs. 25 lakhs.

The repayment tenure for the SMILE scheme is 10 years, which includes a 36-month moratorium period. Furthermore, for the soft loan, the interest rate for the first three years ranges from 9.15% to 9.35%, and for term loans, it ranges from 9.45% to 9.95%. However, starting from the fourth year, the interest rate ranges from 11.70% to 12.70%, which can be a floating or fixed rate.

Eligibility Criteria:

The firm must have a minimum promoter contribution of 15% subject to a maximum debt-to-equity ratio (D/E ratio) of 3:1.

15. Partnership with OEMs

This SIDBI scheme serves as a comprehensive solution for MSMEs seeking to purchase plants and machinery directly from OEMs, and is well-known for its simplified credit disbursement process. Typically, the scheme offers loans of up to Rs. 100 lakhs but this amount can increase under special circumstances and specific guidelines from the bank.

The repayment tenure for such loans extends up to 60 months, including the moratorium period. The interest rate applied to the funding follows the guidelines of the SIDBI SMILE scheme.

Eligibility Criteria:

The firm must have been in operation for at least three years.
The company must have satisfactory financial statements.

SIDBI Schemes Involving Indirect Financing

Under indirect financing, the bank offers the following schemes:

1. Refinance Scheme for Micro and Small Enterprises (RMSE XII)

This SIDBI scheme provides refinance assistance to prime lending institutions (PLIs) for lending to micro and small enterprises (MSEs) at a rate linked to the 10-year Indian government bond yield. The scheme has two variants: RMSE XII-Regular and RMSE XII-ICDD.

Under RMSE XII, the loan amount depends on the applying company’s repayment capacity, and the repayment period can be up to five years. The scheme covers various activities such as manufacturing, services and trading. The eligibility criteria for MSEs are three years of operational history and demonstrated profitability in the past two years.

2. SIDBI Revolving Fund for TIFAC

This fund provides refinancing assistance to PLIs when lending to MSMEs for technology upgradation under the Technology Information Forecasting and Assessment Council (TIFAC) programme. Under this, the government aims to promote innovation and research in MSMEs by facilitating their access to technology from diverse sources such as research institutions, universities, and more.

The funding can go up to Rs. 100 lakhs per unit and the repayment period is six years (including a moratorium) starting from the project completion date. The interest rate on the funding has a cap of 5% per annum.

3. Receivable Finance Scheme

This SIDBI scheme provides refinancing assistance to PLIs for the discounting or factoring of receivables for MSMEs. It aims to enhance MSMEs’ liquidity and cash flow by enabling them to sell their invoices or bills at a discounted rate to PLIs.
The scheme’s funding criteria depend on the needs of the MSMEs. In the case of large purchase corporations, the funding limit can be Rs. 50 crores at most. The approved limits are valid for one year.

4. Refinance Assistance to MSMEs for the Purpose of Export (RAMPE)

This SIDBI scheme provides refinancing assistance to PLIs for lending at attractive interest rates to MSMEs engaged in export activities. The funding is subject to an exposure limit set by SIDBI for each bank and various other parameters. The repayment period can extend up to five years. The scheme covers both pre-shipment and post-shipment finance for exports.

Disclaimer: The interest rates for both direct and indirect SIDBI financing products are subject to change. Please refer to the bank’s website before applying for any of these schemes.

How to Apply for a SIDBI Loan

Here are the steps involved in the SIDBI loan application process:

Visit the bank’s official website at https://sidbi.in/en/
Under the ‘Direct Loans’ option, you can find various SIDBI schemes
Click on ‘’ under the Preferred Loan Product box
Click on ‘Registration Form’
Enter your enterprise’s name, email address, and the mobile number registered with Udyam, and create a password
again on the SIDBI portal, choose the relevant scheme, and enter the required loan amount
Share basic details such as the business address, district, and pin code
SIDBI officials will then send a confirmation mail to the email address provided. Once the applicant agrees, the next steps will involve application evaluation and disbursement.

Documents Required for SIDBI Schemes

The list of documents necessary for SIDBI loan processing varies for each scheme. However, the following are the most common documents required:

Application form; this must be duly filled and signed by the applicant
KYC documents of the applicant and co-applicants
Business profile and project report
Audited financial statements for the past three years
Provisional financial statements for the current year
Bank statements for the past six months
Copy of the Udyog Aadhaar Memorandum (UAM)
Copy of the GST registration certificate (if applicable)
Copy of consent for establishment from the Pollution Control Board (if applicable)
Copy of sanction letters from other lenders (if any)
Proforma invoice or quotation of items to MSMEs that wish to purchase
Any other document as required by SIDBI.

Benefits of SIDBI Schemes

SIDBI schemes offer several benefits. These include:

Customised Products: SIDBI understands that different MSMEs have varying needs and challenges. Thus, the bank offers customised loans that suit your business requirements. You can choose from various loan products that cater to your specific purpose, such as purchasing equipment, expanding production, upgrading technology, developing new products, and more. You can also avail of loans for working capital or receivables financing.
Attractive Interest Rates: SIDBI offers loans at attractive interest rates that are lower than market rates. This is because the bank has tie-ups with various lenders and foreign financial institutions that provide funds at discounted rates. SIDBI also passes on the benefits of government subsidies and schemes to MSMEs.
Collateral-Free Loans: Some SIDBI loans are available without collateral or security, and provide funding of up to Rs. 1 crore. This makes it easier for MSMEs to access finance without worrying about pledging their assets. SIDBI also covers some of its loan products under the Credit Guarantee Scheme.
No Tempering of Company Ownership: SIDBI does not interfere with the ownership or management of your company when you take a loan. You retain full control over your business decisions and operations and the bank only monitors the performance and repayment of your loan.
Transparent Procedures: SIDBI follows a transparent and simple procedure for loan application and sanction. You can apply online through its portal or mobile app and upload the required documents. The bank evaluates your loan proposal based on factors such as your credit score, business profile, and financial statements. You can enjoy the convenience of monitoring your loan application status online.
Special Assistance: This SIDBI function includes mentoring, capacity building, and advisory services to enhance business skills, technology adoption, and market access. The non-financial aid supports project preparation, feasibility studies, market research, and skill development programmes. These initiatives empower small businesses with the knowledge, tools, and expertise to navigate challenges.
Flexible/Customised MSME Business Loans: Startups and small-scale enterprises sometimes struggle to get adequate financing for their operations. SIDBI provides numerous lending programmes to their consumers. If a person has a specific need, the institution can issue customised MSME loans for businesses based on the needs of the business. This personalised strategy assists small firms in obtaining loans for business and financing as needed.
Favourable Interest Rates: The MSME industry is hampered by high lending rates. SIDBI makes it simple for businesses to obtain working capital loans by offering low-interest rates. SIDBI is able to maintain low-interest rates because of partnerships with a range of international financial organisations.
SIDBI Loan Without Collateral: Banks typically provide business loans in exchange for collateral. SIDBI, on the other hand, offers business loans without collateral to its borrowers, and MSMEs can borrow up to Rs. 1 crore without having to present collateral.
Subsidies from the government: Whenever the government chooses to subsidise MSMEs, SIDBI provides such business loans and working capital business loan programmes to entrepreneurs at a lower rate of interest than typical and with simple terms and conditions. You can use the business loan EMI calculator online to check the monthly interests/EMIs you need to pay on your business loans.
Procedure Transparency: SIDBI’s loan application and approval processes are straightforward, with no added charges. Interest rates and other costs are disclosed to lenders in advance to ensure a high degree of transparency in the lending process.
Particular Assistance: SIDBI bank offers loans to MSMEs through several SIDBI programs and aids fledgling enterprises and entrepreneurs by giving essential business insights and coaching. During the MSME business loan application process, their managers assist company owners in making the best selections.
There is no tampering with company ownership: To get financing for their firm, business owners may have to give up a portion of their shareholding. SIDBI protects business owners’ interests by providing financing and loans without impacting the ownership of the company.

Conclusion

Consumers can request business loans and financial help on SIDBI’s website. A business owner may ask for a loan via the online application procedure with only a few clicks. A person must first enroll on the SIDBI official site with login details and then pick the plan and loan amount required. Finally, personal information must be entered to finish the online application. SIDBI personnel give business loans to MSMEs after assessing the application and fulfilling the requirements. This monetary institution’s loans and credit play a significant part in the nation’s progress and development of this industry.

FAQs

Q 1 What is the full form of SIDBI and when it was Established?

The full form of SIDBI is Small Industries Development Bank of India. It is a financial institution established in 1990 under an act of parliament, and its primary aim is to promote, finance, and develop the micro, small, and medium enterprise (MSME) sector in the country.

Q 2: Does SIDBI evaluate a micro business’s credit record when providing an MSME loan?

Ans: The SIDBI institution does not accept loans based on the credit record of the small businessmen. Its principal goal is to provide financial assistance to small company units so that they may expand their operations without limits.

Q 3: What papers do I need to apply for a business loan with SIDBI?

Ans: Entrepreneurs must produce address proof, identification evidence, an Aadhaar card, a pan card, and other business-related documentation.

Q 4: Who is eligible to apply for a SIDBI loan?

Ans: A micro, small, or medium firm in India can apply for a direct loan from SIDBI. The agency offers a variety of appealing financing packages to both new and experienced business owners.

Q. 5 Does SIDBI provide MUDRA loans?

Ans: The Micro Units Development and Refinance Agency (MUDRA) is a SIDBI subsidiary that funds banks and NBFCs to lend to micro units under the Pradhan Mantri Mudra Yojana (PMMY) scheme. The primary objective of MUDRA is to offer loans of up to Rs. 10 lakhs to micro-enterprises operating in the manufacturing, trading, and service sectors. The scheme is further categorised into three loans: Shishu, Kishore, and Tarun.

Q. 6 What types of loans does SIDBI provide?

Ans: SIDBI offers a range of loan products tailored to the specific needs of MSMEs. This includes term loans for fixed asset acquisition, working capital finance, equipment finance, technology upgradation loans, and loans for export-oriented units. The bank also provides loans for startups and innovative ventures.

Q. 7 What are the subsidiaries of SIDBI?

Ans. SIDBI’s most important subsidiaries are:

Micro Units Development and Refinance Agency (MUDRA Bank)
India SME Technology Services Limited (ISTSL)
India SME Asset Reconstruction Company (ISARC)
Acuité Ratings and Research Limited
Receivables Exchange of India Limited (RXIL)
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Q. 8 Is SIDBI regulated?

Ans. The Reserve Bank of India (RBI) regulates SIDBI to ensure it complies with the regulatory guidelines and norms in the financial sector.

Q. 9 Can SIDBI help MSMEs with debt restructuring or rehabilitation?

Ans. Yes, SIDBI provides support for debt restructuring and rehabilitation of MSMEs. It offers schemes and initiatives to help such firms overcome financial difficulties and revive their businesses.

Q. 10 What is the interest rate charged by SIDBI for its financial products?

Ans. The interest rates offered by SIDBI may vary based on the scheme and prevailing market conditions. These rates are typically competitive and conducive to the needs of small businesses.

Q. 11 How do I get more information about SIDBI loan schemes?

Ans. For more information about SIDBI loan schemes, you can visit the bank’s official website, which provides detailed information about various loan schemes, eligibility criteria, and application procedures. You can also get information through your local SIDBI office.

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RoDTEP Scheme – Benefits and Eligibility

admin — Fri, 07 Jul 2023 09:27:00 +0000

What is RoDTEP?

RoDTEP, full form Remission of Duties and Taxes on Export Products, is an export promotion scheme by the government of India. The scheme became effective from January 1 2021 and aims to offset taxes and duties incurred on exported goods. It helps in reducing the input cost of exported goods, thereby ensuring goods made in India are competitive.

The RoDTEP scheme offers rebates on all central, state, and local duties/taxes/levies on exported goods. This covers both direct and indirect costs borne by the exporters and cumulative indirect taxes at prior stages of production. The objective is to compensate for the duties/taxes/levies on goods and services used in the production and distribution of exported goods.

Objectives of RoDTEP

The objectives of the RoDTEP scheme are as follows:

Neutralise taxes and duties on exported goods
Provide relief to exporters by reimbursing the costs of hidden taxes and duties
Reduce the burden of input costs on exporters, thereby making India-made products and services more competitive internationally
Promote, support, and encourage export activities in India by reducing the cost of exports
Facilitate economic growth by reducing the tax burden on exporters.

Features of the RoDTEP Scheme

The features of the RoDTEP scheme are as follows:

Refund of Embedded Duties and Taxes
The scheme actively promotes the export of goods and services exclusively. Earlier, exporters included taxes and duties as input costs and passed them on to their international buyers. Through RoDTEP, exporters can claim refunds and lower their selling prices. Some of the common taxes and duties for which rebates are available are:
1. Duties on the purchase of electricity
2. VAT and excise duty on fuel used on transportation cost for diesel generator (DG) sets and power plants
3. Stamp duty on export documents
4. Property tax/municipal tax/mandi tax.
WTO Compliance
RoDTEP is a policy compliant with World Trade Organization (WTO) guidelines and is designed to assist exporters in meeting international standards. The scheme enables exporters to enhance their goods’ cost competitiveness in the global market. By providing assured duty benefits, it supports exporters in offsetting taxes and making their products more attractive to international buyers.
Multi-Sector Strategy
The scheme ensures uniformity across all sectors. However, certain sectors like steel, pharmaceuticals, and organic and inorganic chemicals are excluded at present from the benefits provided.
Digitalisation and Transparency
The RoDTEP scheme emphasises digitalisation and transparency in the application and processing of rebates. It aims to simplify the procedures by leveraging technology and ensuring quick disbursal of benefits to exporters.
Complementary to Other Schemes
The scheme is complementary to existing export promotion schemes such as the Merchandise Exports from India Scheme (MEIS). It provides an additional benefit by covering taxes and duties not addressed by other schemes.

These features collectively make the RoDTEP scheme a comprehensive mechanism for compensating exporters for the taxes and duties incurred on exported goods, thereby supporting and encouraging export activities in India.

Eligibility for the RoDTEP Scheme

Here are the key eligibility criteria for the scheme:

Most sectors, including textiles, can enjoy the benefits provided, with the exception of certain industries such as steel, pharmaceuticals, and organic and inorganic chemicals.
The scheme will give priority to labour-intensive sectors that already receive benefits under the MEIS.
Both manufacturer exporters and merchant exporters (traders) are eligible for the scheme.
There is no specific turnover threshold required to claim the RoDTEP scheme benefits.
Re-exported products are not eligible for benefits under the scheme; only products of Indian origin are eligible.
Special economic zone (SEZ) units and export-oriented units (EOUs) are eligible for the benefits.
The scheme also applies to goods exported via courier through e-commerce platforms.

Exporters need to meet these eligibility criteria and adhere to the guidelines provided by the government and the relevant authorities to enjoy the benefits of this scheme.

Sectors Ineligible for RoDTEP

The following categories of exports/exporters are not eligible for rebate under this export promotion scheme:

Export of imported goods meant for re-export
Trans-shipment exports, where the goods originate in a third country but pass through India
Export products that are subject to a minimum export price or export duty
Supplies of products from domestic tariff area (DTA) units to SEZ and free trade warehousing zone (FTWZ) units
Products manufactured in electronic hardware technology parks (EHTPs) and biotechnology parks (BTP)
Products manufactured or exported by units licenced as 100% EOUs
Goods that have been put to use after manufacture.

Importance of the RoDTEP Scheme in India

The government introduced this scheme to address various needs and challenges faced by exporters in the country. The key needs for implementing this scheme are as follows:

Boost Export Competitiveness: The scheme aims to enhance the competitiveness of Indian exports in the global market. Reducing the embedded taxes and duties on exported goods helps exporters offer their products at more competitive prices.
Neutralise Unrefunded Taxes: Previously, various taxes and duties applied on exported goods, which led to an increase in costs for exporters. The RoDTEP scheme neutralises these unrefunded taxes and levies, thus ensuring a level playing field for Indian exporters.
Address Hidden Taxes and Duties: The previous embedded taxes and duties in exported goods stemmed from various central, state, and local bodies, which led to hikes in costs. This scheme targets these hidden taxes and aims to provide relief to exporters by refunding or remitting them.
Support Cash Flow for Exporters: In the past, exporters often faced challenges in terms of blocked working capital due to the unavailability of timely refunds on taxes and duties. The RoDTEP scheme helps in addressing this issue by providing assured duty benefits and improving cash flow for exporters.
Promote Export-led Growth: The government’s objective is to promote export-led growth as a driver of the economy. By reducing the burden of taxes and levies, this scheme incentivises exporters and encourages them to expand their export activities, contributing to economic growth and employment generation.
Align with International Trade Standards: RoDTEP helps Indian exporters meet international trade standards by making their goods cost-competitive in the global market. It aims to align India’s export policies with international norms, enhancing the country’s export performance.

Overall, the RoDTEP scheme addresses the needs of exporters, promotes export competitiveness, supports cash flow, and contributes to the growth of India’s export sector while aligning with global trade standards.

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Conclusion

The RoDTEP scheme has emerged as a significant policy initiative in India, aiming to boost export competitiveness and provide much-needed relief to exporters. By refunding or remitting unrefunded taxes and duties on exported goods, the scheme promotes a level playing field and enhances the country’s export potential. Its inclusive nature, covering a wide range of various sectors and industries, reflects the government’s commitment to supporting a variety of exporters.

However, it is essential for exporters to understand the eligibility criteria and comply with the scheme’s guidelines to fully benefit from it.

Frequently Asked Questions (FAQs)

Q. 1 What is the full form of RoDTEP?
Ans: The full form of RoDTEP is the Remission of Duties and Taxes on Export Products.

Q. 2 Which goods and services are eligible for benefits under RoDTEP?
Ans: This scheme actively extends its benefits to most goods and services exported from India, except in certain ineligible sectors.

Q. 3 Which sectors are currently excluded from the benefits of the RoDTEP scheme?
Ans: Sectors such as steel, pharmaceuticals, and organic and inorganic chemicals, are currently excluded from the benefits of this scheme.

Q. 4 Are re-exported products eligible for benefits under the RoDTEP scheme?
Ans: No, re-exported products are not eligible for benefits under this scheme. All of the applicable exported products and services must originate in India.

Q. 5 Does the RoDTEP scheme comply with WTO regulations?
Ans: Yes, this scheme is compliant with World Trade Organization (WTO) regulations.

Q. 6 How does the RoDTEP scheme support exporters?
Ans: This scheme supports exporters by providing assured duty benefits, neutralising unrefunded taxes, and improving cash flow.

Q. 7 What is the RoDTEP scheme?
Ans: RoDTEP (full form: Remission of Duties or Taxes on Export Products) is an Indian government initiative that aims to refund unrefunded taxes and duties on exported goods, thus enhancing the country’s export competitiveness.

Q. 8 When was the RoDTEP scheme introduced?
Ans: The government of India introduced this scheme in 2021. It became effective on January 1 2021 and is valid until 2025.

Q. 9 Can RoDTEP and MEIS benefits be claimed simultaneously?
Ans: No, it is not possible to claim RoDTEP and Merchandise Exports from India Scheme (MEIS) benefits simultaneously.

Q. 10 Can there be a remission of arrears from one financial year to the other under RoDTEP?
Ans: This scheme actively prohibits the carrying over of remission of arrears or contingent liabilities to the next financial year.

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PLI Scheme in the Textile Industry – A Guide

admin — Mon, 03 Jul 2023 08:44:00 +0000

Introduction

Food, shelter, and clothing are the basic needs of human beings in society. In India, with the second-largest population globally, employment opportunities for the masses are paramount. The textile sector is one such sector that can provide employment opportunities to both skilled and unskilled workforce.

This is because the textile sector is labour-intensive. Presently, it provides employment opportunities to about four crores, fifty lakh people. It is the second-largest sector in employment creation, with the agriculture sector being the first one. In addition, India has a rich heritage with regard to textiles, fabrics, and apparel from ancient times.

Hence, to promote the textiles sector and other sectors, the Union government has started the Production Linked Incentive (PLI) scheme for textiles. This scheme would be operational for nine and half years (24/09/2021 to 3/03/2030), and incentives would be payable to selected companies for five years.

PLI Incentive Updates

In recent updates, production-linked incentive (PLI) schemes have demonstrated remarkable outcomes in India, including increased production, job creation, and exports. These schemes have attracted a whopping 76% rise in foreign direct investment (FDI) in the manufacturing sector, reaching $21.34bn in 2021-22. With an incentive outlay of around $26bn (Rs. 1.97 lakh crores), PLI schemes are here to stay to boost production capabilities and create global champions in 14 sectors.

With 733 approved applications in these 14 sectors and an expected investment of Rs. 3.65 lakh crores, PLI schemes have already realised an actual investment of Rs. 62,500 crores. This has led to a remarkable boost in production and sales, exceeding Rs. 6.75 lakh crores, as well as the creation of around 325,000 jobs by March 2023.

For example, one PLI scheme has successfully convinced major smartphone companies to relocate their suppliers to India. Within a mere three years, India has achieved a significant value addition of 20% in mobile manufacturing, outperforming Vietnam’s 18% achieved over 15 years and China’s 49% achieved over 25 years.

November 2020

PLI schemes rolled out in the following sectors in November 2020:

Sector	Overseeing Department
Prescription Medications	Department of Pharmaceuticals
Technology or Electronic Products	Ministry of Information and Electronics Technology
Networking and Telecom Products	Department of Telecommunications
Food Products	Ministry of Food Processing Industries
ACS and LED (White Goods)	Department for Promotion of Industry and Internal Trade
Energy-Efficient Solar PV Modules	Ministry of New and Renewable Energy
Auto Components and Automobiles	Department of Heavy Industry
ACC (Advance Chemistry Cell) Battery	Department of Heavy Industry
Specialty Steel	Ministry of Steel
MMF Segment and Technical Textiles	Ministry of Textiles

PLI schemes rolled out in the following sectors in March 2020:

March 2020

Sectors	Overseeing Departments
Drug Intermediates (DIs), Key Starting Materials (KSM) and Active Pharmaceutical Ingredients (APIs)	Department of Pharmaceuticals
Electronics Manufacturing on a Large Scale	Ministry of Electronics and Information Technology
Medicinal Devices Manufacturing	Department of Pharmaceuticals

Read on to discover the incredible benefits and potential of PLI incentives as well as their significance.

Objectives of PLI Schemes

PLI schemes are transformative and work towards enhancing India’s compliance with World Trade Organization (WTO) commitments and promoting a non-discriminatory and neutral environment for domestic sales and exports.
The schemes provide active support to food manufacturing companies that meet the eligibility criteria, enabling them to expand their processing capacities, establish strong brands abroad, and become global champions in their industry.
By strengthening Indian food product brands, PLI schemes aim to enhance their global visibility and acceptance, resulting in increased employment opportunities beyond farming.
These schemes safeguard farmers’ income by ensuring fair and lucrative prices for agricultural products.

Salient Features of PLI Schemes

These initiatives help bring back ancient designs and customs, empowering neglected traditions in the country.
Increased production under PLI schemes drives growth and development in various sectors.
Focus on manpower and creativity fosters adaptable building systems that help combat climate change and potentially reverse its effects.
Through PLI schemes, the government encourages investment in plants and machinery to meet specified requirements during the first two years of operation.
A significant allocation of Rs. 10,900 crores in the central sector is available for investment.
The schemes provide incentives for production in essential food categories such as ready-to-eat foods, millet-based products, processed fruits and vegetables, seafood products, and mozzarella cheese.
The duration of the PLI schemes spans six years, from 2021-22 to 2026-27, revolutionising industries and creating opportunities for all.
These schemes cover small businesses that create innovative and organic products like free-range eggs, poultry meat, and egg products.
Entities specialising in innovative and organic products are exempt from the minimum sales and mandatory investment requirements.
PLI initiatives provide support for branding, marketing, and grants for signage, shelf space, and international marketing, with the overarching aim of promoting the development of strong Indian brands globally.

Targets and Strategies for Implementation Under PLI Schemes

PLI schemes are implemented nationwide, incorporating specific goals and strategies.
Specific project management agencies (PMAs) are responsible for implementing these initiatives. They will evaluate applications, verify eligibility, and process incentive payments.
PLI incentives will be available over six years, ending in 2026-27. The following year will see incentive payments being made annually.
A set fund limit ensures controlled costs for these schemes. Each beneficiary will have a maximum incentive predetermined, which they cannot exceed regardless of their performance.
The PLI programme aims to expand processing capacity by 2026-27, resulting in the production of processed foods worth a total of Rs. 33,494 crores and creating job opportunities for around 2.5 lakh people.

Methodology and Mechanisms Associated with PLI Administration and Implementation

To enjoy the maximum benefits of PLI, there is some important information that you should keep in mind:

The cabinet secretary chairs the Empowered Group of Secretaries at the Centre, ensuring effective monitoring of these schemes.
An Inter-Ministerial Approval Committee (IMAC) will assess the eligibility of applicants and determine their approval for the schemes. IMAC will also decide on the sanction and release of PLI incentive funds.
The ministry will diligently develop an annual action plan encompassing a wide range of activities to propel these initiatives forward.
There is a comprehensive third-party evaluation process and a mid-term evaluation mechanism to ensure transparency and accountability in PLI schemes.

What is the PLI Roadmap to boost Indian manufacturing?

The Central Government has sanctioned an ambitious PLI scheme for fourteen key sectors of the economy. These sectors include pharmaceuticals, electronics, food products, textiles, etc. This scheme offers a type of subsidy to the concerned sector so that it can overcome any disadvantage faced by it. Here, incentives are offered to the Indian manufacturers when they achieve incremental sales. Incremental sales boost manufacturing in the country and create employment opportunities. It also promotes the Atma Nirbhar Bharat mission of the government. Under the PLI scheme, the government sanctions a given amount of money directly from the Union budget to a given sector.

Purpose of PLI Scheme

The PLI scheme was started to increase the scale of the domestic manufacturing industry so that imports are reduced and employment opportunities are promoted. With the PLI scheme, the government intends to bring about women’s empowerment and enhance the contribution of women to the general economy of the workforce.

Who launched the PLI scheme for textiles and other sectors?

NITI Aayog started working on developing a set of objective criteria. It involved determining value addition done by the companies which benefited from the financial rewards announced under PLI schemes. Union Finance Minister, Smt. Nirmala Sitharaman announced allocating Rs. 1.97 lakh crores for the PLI Scheme, covering fourteen key sectors. The aim is to make India a manufacturing hub, increase production to 30 lakh crore in the next five years, and generate employment opportunities.

Who can apply for the PLI scheme for the textile sector?

This scheme can be availed by any person (including company/firm/limited liability partnership/trust) who intends to start a separate manufacturing company and make a minimum investment of Rs. 300 crore for producing notified products. Incentives would be provided to companies that achieve a minimum turnover of Rs. 600 crore through manufacturing and selling such notified products in the first performance year. Before investing the required amount, each participant needs to incorporate a new company under the Companies Act, 2013.

Incentives Under PLI Scheme for Textile Sector

Incentives would be provided to the participants who achieve minimum investment and incremental turnover as specified in the scheme. The participants need to achieve the prescribed turnover target for the year and a 25% increase in turnover over the immediately preceding year’s turnover in the succeeding years. The formula for computing the incentives is as follows:

“Net Incremental Sales within the cap of Notified Product(s) excluding taxes multiplied by the Rate of Incentive in percentage for the Performance Year.”

What is the PLI Roadmap for the Textiles Industry?

Under the PLI roadmap for the textile sector, the Union government has approved 61 applications from companies. The selected applicants may bring in an investment of Rs. 19,000 crores. Out of 61 applications approved, seven are foreign companies. This potential investment under the PLI roadmap is expected to generate a turnover of Rs. 184,917 crore and employment for 2,40,134 people. The financial outlay of the government under this scheme is Rs. 10,683 crores for five years. This outlay would be applicable to give a boost to textile products such as Man Made Fabric (MMF) apparel, MMF fabrics (14 categories), and products related to technical textiles (10 categories).

The items covered under MMF fabrics include woven fabrics with nylon, polyester, and others. Technical textiles included under the scheme are defence textiles (bulletproof vests, clothing, and tents used in submarine and fighter aircraft, safety airbags, tyre cords, protective clothing such as personal protective equipment, and fabrics and clothing used against fire accidents).

Investment, Turnover, and Incentives

The applicants selected under the PLI scheme need to demonstrate the following in Part I and Part II of the scheme’s implementation:

In Part I, they are expected to invest a minimum of Rs. 300 crore and generate a minimum turnover of Rs. 600 crore. The investment would be in the plant, machinery, R&D activities, and civil works but exclude investment in land and administrative buildings.
In Part II, a minimum investment of Rs. 100 crore is required, and a minimum turnover of Rs. 200 crores. The investments would go to inspirational districts, rural areas, and Tier 2 and Tier 3 towns.

For Part I, the available incentives start from 15% for the first year, decreasing by one percentage point every year for the next four years. For Part II, the incentives start from 11% for the first year, decreasing by one percentage point every year for the next four years. For both Part I and Part II, the incentives are available only on the incremental turnover of 25%. Let us understand by an example. Let in the first year the prescribed turnover be Rs. 600 crore. Then in the second year, the prescribed turnover should be Rs. 750 crore (i.e.Rs. 600 crore + 25% of Rs. 600 crore). In the first year, the incentive is computed on Rs. 600 crores, and in the second year, the incentive is credited only on Rs. 150 crores (i.e., 25% increment on the first year’s turnover of Rs. 600 crores). This procedure continues for the five-year period.

Aims of Textile PLI Scheme

Following are the aims of this PLI scheme for the textile sector:

Through the incentives given by this scheme, textile companies operating in India and also textile workers can compete with the Chinese textile mills and undertake productive ancillary activities.
According to the commerce ministry, there is a huge demand for Indian textiles in the international markets. This PLI scheme for the textile sector intends to grab the demand by acquiring skills related to the design of MMF and garments.
Government support through this PLI scheme for the textile sector and the artisans working in this domain would create a ripple effect in other areas of the economy.
This specific textile PLI scheme is expected to increase textile parks in India. Thus, in 10 years, India may become the textile hub of the world.
The textile company management can use the grants received under the PLI for the textile sector to automate the textile factories. This would bring in economies of scale.

Sector-Wise PLI Eligibility Criteria

PLI eligibility varies based on the approved industry. Here are some of the criteria:

Telecom units need to meet investment growth and manufacturing sales requirements.
MSME companies can receive investments of up to Rs. 10 crores, while other companies can receive investments of up to Rs.100 crores.
SMEs and other companies must have at least 50% of their subsidiaries compliant with food processing regulations.
SME selection considers factors such as the firm’s proposal, product innovation, and level of product development.
Pharmaceutical businesses must undertake greenfield projects and maintain a net worth of at least 30% of total investments.
Domestic value addition (DVA) requirements stand at about 90% for fermentation-based products and at least 70% for chemical syntheses.

PLI Scheme Contribution towards Employment Generation

Since the creation of these schemes, India’s processing capacity has continued to expand, resulting in a substantial processed/ready-to-eat food output of Rs. 33,494 crores. Furthermore, these initiatives will pave the way for the creation of employment opportunities for nearly 2.5 lakh individuals by the year 2026-27.

PLI Schemes and Custom Duty

These schemes actively reduce customs duty, to the benefit of certain industries including raw material importers in the textile industry, as well as the shipping sector. The reduction in customs duty positively impacts shipping costs and ensures the long-term viability of central public sector industries. The PLI schemes also improve logistics and infrastructure related to railways, shipping, and highways. In this regard, the government has allocated Rs. 15,700 crores for the establishment of new shipping lines.

PLI schemes have also resulted in the re-evaluation of 400 customs duty exemptions and concessions. In addition, the announcement of Manufacturing and Other Operations in Warehouse Regulations (MOOWR) enables considerable duty savings for eligible companies.

India’s Textile and Apparel Exports from 2018 to 2022

Here is the data on India’s textile and apparel exports from fiscal year (FY) 2018 to FY 2022:

Commodity	2017-18	2018-19	2019-20	2020-21	2021-22
Textile and apparel (including handicrafts)	$37.55bn	$38.40bn	$35.18bn	$31.59bn	$44.44bn

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Conclusions

The Textile and garment sector is the backbone of the fashion industry. With its wide variety of clothing and fabrics, India can become the global leader in this sector. This PLI scheme for textiles and other related areas can go a long way in helping this sector. It has laid out a unique PLI roadmap to achieve its true potential in terms of exports. In a nutshell, the textile sector can carve out a niche in international trade and commerce.

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PM SVANidhi Scheme’s Key Features and Benefits

admin — Sat, 01 Jul 2023 16:05:00 +0000

Latest news updates about PM SVANidhi Yojana

June 29, 2023: The PM SVANidhi Yojana, which the government of India launched in 2020, has now been extended until December 2024. The Brihanmumbai Municipal Corporation (BMC) has urged street vendors who have not yet taken advantage of the scheme to get in touch with their local ward office. As of now, the civic body has provided loans of Rs. 10,000 each to 90,000 hawkers as part of this initiative.
June 28, 2023: During a review of the PM SVANidhi scheme, Prime Minister Narendra Modi called upon the state governments to actively identify and include all eligible street vendors in urban areas, particularly in Tier II and Tier III cities. He emphasised the need for a focused and comprehensive drive to promote digital transactions among these vendors under the PM Street Vendor scheme.
The prime minister also directed the chief secretaries of various states to ensure that the family members of the scheme’s beneficiaries receive the benefits of other government schemes through the SVANidhi se Samriddhi campaign.
June 12, 2023: According to data provided by the Union Ministry of Housing and Urban Affairs, out of the total beneficiaries (36.33 lakhs) under the PM SVANidhi Yojana, 21.31 lakh vendors are men, 15.02 lakh are women, and 219 beneficiaries are from the ‘others’ gender category.
Notably, in 10 states and Union territories, predominantly in the Southern and Northeast regions, women represent the majority of the beneficiaries. Andhra Pradesh has 70% women beneficiaries, Telangana has 66%, Tamil Nadu has 64%, and Karnataka has 50%. The cumulative number of women beneficiaries in Andhra Pradesh, Telangana, Tamil Nadu, and Karnataka amounts to 5,80,956, which is nearly 39% of the total 15,02,597 women beneficiaries of the scheme nationwide.
June 02, 2023: Minister for Housing and Urban Affairs Hardeep Singh Puri recently commended the PM Street Vendor’s AtmaNirbhar Nidhi scheme for reaching a significant milestone of three years. Within this short span, the scheme has successfully provided microcredit to over 3.6 million street vendors across the nation.
By June 30, 2023, AtmaNirbhar Nidhi had disbursed more than 4.64 million loans, totaling a cumulative amount of Rs. 5,795 crores. This noteworthy accomplishment highlights the substantial impact of the scheme in empowering the livelihoods of these vendors.
June 01, 2023: Minister for Housing and Urban Affairs Hardeep Singh Puri has launched a mobile app for the PM SVANidhi Yojana, aimed at simplifying the loan application process and providing street vendors with information about the scheme.
During an event in New Delhi, the minister praised the street vendor scheme on its completion of three years and highlighted that it has been one of the fastest-implemented government initiatives, leading to remarkable financial inclusion and digital literacy in the country’s cities and towns. Puri added that the scheme is playing a crucial role in providing street vendors with dignity, stability, and economic opportunities.

Introduction to PM SVANidhi Yojana

Through the foundation of the ‘Make in India’ movement in 2014, the Indian government firmly set out on a journey to promote business, entrepreneurship, and self-sufficiency among the country’s public. Since then, the authorities have taken several steps to provide the public with financial as well as technical resources to help them realise this vision.

Schemes like the Pradhan Mantri Employment Generation Programme (PMEGP), Pradhan Mantri MUDRA Yojana (PMMY), and several others are making business and trade easier for India’s young, budding economy.

The PM SVANidhi Yojana is another such step in the direction of empowering the economy by providing finances for one of its most integral components: street vendors, also known as vendors or hawkers, and colloquially as thelewalas, rehriwalas, and theliphadwalas. Despite their apparent insignificance and hard working conditions, street vendors make up a massive part of almost any Indian market.

These individuals play a crucial role in ensuring that essential goods and services are readily available to urban residents at affordable prices, and conveniently accessible right at their doorsteps. Through SVANidhi Yojana, the government aims to help them grow and develop by offering suitable credit facilities.

What is PM SVANidhi Yojana?

The PM SVANidhi scheme, also known as the PM Street Vendor’s Atma Nirbhar Nidhi (SVANidhi) Scheme, is an initiative launched by the government of India. The primary objective of this initiative is to formalise the business structure for street vendors and provide them with access to financial resources to enhance their livelihoods.

The government aims to empower these individuals by offering them working capital loans and promoting their economic independence. The PM SVANidhi Yojana also encourages timely loan repayments by offering enhanced loan limits for eligible vendors in subsequent loan cycles.

Features of PM SVANidhi Yojana

The PM Street Vendor scheme has several notable features:

Collateral-free loans: Street vendors can avail of collateral-free working capital loans of up to Rs. 10,000. These loans allow them to meet their immediate business needs without having to pledge assets as security.
Digital payments: The scheme promotes digital transactions by incentivising street vendors to adopt digital payment systems. It provides eligible individuals with a monthly cashback of ₹100 on making digital transactions using prescribed digital payment platforms. Vendors can also complete the registration and application for the PM SVANidhi Yojana online, which further promotes digitisation.
Interest subsidies: Vendors who repay their loans on time are eligible for an interest subsidy of 7%. This reduces the financial burden and incentivises timely repayments.
Loan tenure: Street vendor loans provided under the scheme have a tenure of one year and vendors have the flexibility to repay the amount in monthly instalments or as a single payment at the end of the tenure.
ID cards: The PM SVANidhi Yojana facilitates the issuance of physical or digital identification cards for street vendors. This helps in formalising their status as recognised vendors and provides them with various benefits and protections.
Insurance coverage: The scheme provides hawkers with access to affordable accident insurance coverage of Rs. 10,000. This offers them a safety net in case of unforeseen accidents or mishaps.
Skill development: The PM SVANidhi Yojana focuses on empowering street vendors by providing skill development and capacity-building training. This enhances their entrepreneurial abilities, financial literacy, and business management skills.
Integration with other schemes: The scheme aims to integrate street vendors with other government initiatives. This includes linking them to social security schemes, health insurance programmes, and other welfare benefits.
Nodal agencies: Various nodal agencies implement the PM SVANidhi Yojana at the national, state, and municipal levels. These agencies are responsible for facilitating the loan application process, conducting surveys, and providing support to street vendors.

Objectives of PM SVANidhi Yojana

The PM SVANidhi scheme aims to bring about positive change in the lives of street vendors, promote their economic growth, and integrate them into the formal economy. It does so through these objectives:

Financial inclusion: The scheme aims to provide access to formal credit facilities for street vendors who are typically excluded from the formal financial system. It enables them to avail of street vendor loans to meet their business needs.
Poverty alleviation: By extending financial support to street vendors, PM SVANidhi Yojana aims to uplift their economic status and contribute to poverty reduction. It empowers them to enhance their income and improve their standard of living.
Formalisation: The scheme aims to formalise the street vending sector by providing vendor identification cards and promoting compliance with regulations. This helps in recognising street vendors as legitimate businesses and provides them with access to various government schemes and services.
Skill development: PM SVANidhi Yojana focuses on providing skill development and capacity-building training to the country’s hawkers. It aims to enhance their entrepreneurial abilities, financial literacy, and business management skills, enabling them to operate more effectively.
Digitalisation: The scheme encourages vendors to adopt digital payment systems, promoting a cashless economy and facilitating transparent transactions. It aims to create awareness and facilitate the use of digital platforms for financial transactions among street vendors and their customers.
Social security: PM SVANidhi Yojana aims to provide social security coverage to street vendors by offering access to affordable healthcare, pension schemes, and other welfare benefits. This helps in improving their overall wellbeing and providing a safety net in times of need.
Empowerment of women: The scheme gives special emphasis to women street vendors and aims to empower them by providing equal opportunities and support for their entrepreneurial endeavours.

Eligibility criteria for the PM SVANidhi Yojana

Vendors will need to meet the following eligibility criteria to qualify for this scheme:

Date: PM SVANidhi Yojana is specifically designed for street vendors – including hawkers, small shop owners, cart vendors, and mobile vendors – engaged in vending activities as of or before March 24, 2020.
Vendor certification: Hawkers should possess valid identification proof issued by the concerned urban local body (ULB) or town vending committee (TVC). This certification serves as proof of their vending activity and is a prerequisite for availing of the benefits of the scheme.
Age limit: There is no specific age limit for availing of the benefits of the PM Street Vendor scheme. Hawkers of all age groups can apply provided they meet the other eligibility criteria.
Aadhaar number: Vendors need to possess a valid Aadhaar card for identification purposes and to establish their identity during the application process.
Business Location: Vendors should have a permanent vending stall or cart in a designated vending zone or area identified by the respective ULB or TVC. The scheme primarily targets vendors operating in urban and semi-urban areas.
Loan default: Vendors who have not previously defaulted on funding provided by banks or financial institutions can apply for the scheme’s street vendor loan.

Subsidies provided by the PM SVANidhi Yojana

The subsidy rates are as follows:

Interest subsidy: The PM Street Vendor scheme provides an interest subsidy at a rate of 7% per annum on working capital loans given to vendors. The subsidy operates on a reducing balance basis.
Digital literacy: Street vendors who repay their loans on time are eligible for an additional subsidy of 1% per annum. This encourages and incentivises digital transactions, thereby promoting financial inclusion among street vendors.

It is important to note that the subsidy rates mentioned above are subject to change as per the guidelines and updates provided by the Ministry of Housing and Urban Affairs, which oversees the implementation of the scheme.

Interest rate on street vendor loans

Under the PM SVANidhi Yojana, the lending institutions involved determine the rates of interest on the loans provided to street vendors. These institutions may include banks, microfinance institutions, cooperative credit societies, and more. The guidelines for the interest rate are as follows:

Banks: Scheduled commercial banks, regional rural banks (RRBs), small finance banks (SFBs), cooperative banks, and self-help group (SHG) lenders will follow their prevailing interest rates.
Other institutions: Non-banking financial companies (NBFCs), NBFC microfinance institutions (MFIs), and other lender categories not covered under Reserve Bank of India (RBI) guidelines will adhere to RBI guidelines for NBFC-MFIs.

PM SVANidhi Yojana Pre-Application Procedure

The procedures outlined here will guarantee that you are prepared to begin the registration procedure on the site.

1. Look for your name on the vendor survey list and make a note of your Survey Reference Number (SRN).
2. Carry a copy of the coefficient of variation (COV) or identification card on hand for uploading throughout the application procedure.
3. The system will generate a Preliminary COV for you when you submit an online form.
4. Save a copy of the Letter of Recommendation (LOR) for filing.
5. The Vendor must state at least one of the following:
During the pandemic shutdown, the seller got One-Time Assistance. The seller must be a member of a hawkers/vendors organisation.

Pm Svanidhi Yojana Online Registration

Post completion of the aforementioned procedure, you must be able to access the login using your account utilising the PM SVANidhi login method described above. Candidates need to use their cellphone number to begin the PM SVANidhi registration procedure. Other organisations, on the other hand, will have to commence and complete the PM SVANidhi login procedure using a username and password generated for them on the website.

Pm Sannidhi Yojana Apply Online

Step one: Open http://pmsvanidhi.mohua.gov.in/ the official webpage.
Step two: After that, you must obtain the PM SVANidhi Scheme Financing Registration Form.
Step three: Choose the merchant category for which you are eligible.
Step four: Completing the Loan Application Form (LAF). Your Aadhaar must be connected to your cell phone number.
Step five: After completing all of the required information, submit the application form.

How to Check Your PM SVANidhi Application Status

Follow these procedures to verify the status of your application:

Visit the PM SVANidhi webpage at https://pmsvanidhi.mohua.gov.in/.
Select the ‘Street Vendor Survey Search’ tab.
Enter the required information such as State, Certificate of Vending No., Vendor-Id Card Number, Name of Street Vendor, ULB Name, Mobile Number, and Father’s Name/Spouse Name.
Once completed, you may check the progress of your survey by clicking ‘Search.’

Login Procedure for PM SVANidhi

One may only begin the PM SVANidhi authentication and authorization if they have previously applied for the scheme’s incentives as either a creditor or as a beneficiary. After that, the user can proceed with the steps outlined to begin the PM SVANidhi login process:

When you go on the legitimate PM SVANidhi website, click the “Login” icon to begin the PM SVANidhi login procedure.
The next stage in the PM SVANidhi login procedure will ask you to provide the login details you provided when you applied. You can start the procedure as a creditor or as a beneficiary.
Then you will be asked to create an OTP. Press the link that enables you to do that.
You will receive an OTP within moments. Enter it into the empty fields on your laptop screen to complete the PM SVANidhi login procedure. After you’ve gotten over that, you will be able to view the prospects for your part in the policy.

Promotion of digital transactions under the PM SVANidhi Yojana

The PM SVANidhi scheme promotes digital transactions by encouraging street vendors to adopt digital payment methods for their business transactions. The loans and financial assistance the scheme provides can be easily disbursed and repaid through digital platforms.

PM SVANidhi Yojana also offers training and guidance to hawkers on how to use various digital payment systems such as mobile wallets, UPI, and QR codes. By embracing such systems, vendors can attract a wider customer base, including those who prefer cashless payments.

Another benefit of digital transactions is that they enable street vendors to keep track of their sales, expenses, and financial records more efficiently, improving their overall business management. The PM street vendor scheme also encourages vendors to integrate with online marketplaces, expanding their reach and visibility to customers.

All in all, the promotion of digital transactions under this initiative contributes to the government’s vision of a cashless economy and fosters a more efficient and secure business environment for street vendors.

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FAQs

Q. 1 What is PM SVANidhi Yojana?

Ans: The PM SVANidhi Yojana, also known as the PM Street Vendor’s Atma Nirbhar Nidhi (SVANidhi) Scheme, is a government initiative that aims to ensure finance is easily available to street vendors so they can manage and grow their business organically. The scheme also encourages timely repayment habits by offering enhanced loan limits for eligible vendors in subsequent loan cycles.

Q. 2 Who can apply for the PM SVANidhi scheme?

Ans: Street vendors and hawkers engaged in vending articles, goods, wares, food items or merchandise of daily use, or who offer services to the public on a street, footpath or pavement from a temporary built-up structure or by moving from place to place can apply for a street vendor loan under the PM SVANidhi scheme.

Q. 3 Who provides loans under the PM SVANidhi scheme?

Ans: Cooperative banks, non-banking financial corporations, microfinance institutions, scheduled commercial banks, regional rural banks, small finance banks, and self-help groups can offer small credit loans under the PM SVANidhi Yojana.

Q. 4 Is collateral needed for a PM SVANidhi street vendor loan?

Ans: PM SVANidhi street vendor loans are collateral-free, which means you do not need to pledge assets in return for the funding.

Q. 5 How long will loan approval take under the PM Street Vendor scheme?

Ans: Under the PM Street Vendor scheme, loan approval may take up to 30 days depending on the accuracy of the documents. The automated process carried out through the mobile app or website helps vendors check the status of their loan applications in real time.

Q. 6 What amount can I get through an initial working capital loan under the PM street vendor scheme?

Ans: Under the PM street vendor scheme, you can get up to Rs. 10,000 through an initial working capital loan.

Q. 7 What is the rate of interest on a PM SVANidhi street vendor loan?

Ans: The PM SVANidhi scheme has varying interest rates applicable on street vendor loans:

Banks: Scheduled commercial banks, regional rural banks (RRBs), small finance banks (SFBs), cooperative banks, and self-help group (SHG) lenders will follow their prevailing interest rates.

Other institutions: Non-banking financial companies (NBFCs), NBFC microfinance institutions (MFIs), and other lender categories not covered under Reserve Bank of India (RBI) guidelines will adhere to RBI guidelines for NBFC-MFIs.

Q. 8 How can I apply for a PM SVANidhi street vendor loan?

Ans: You can apply for a PM SVANidhi street vendor loan online through the official government website or through the scheme’s mobile app.

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