Business finance
Government is offering loans to small businesses during COVID-19
Cash crunch, liquidity crunch, credit crunch are severe for micro, small and medium enterprises for India. Formal finance is available to only 16% of the MSMEs. Most small business fail due to lack of cash.
As per Economic Times: “The credit gap is huge and the most recent survey that we did with Intellecap pegs it at about $240 billion (about Rs 16.66 lakh crore). For a country whose GDP is $2.6 trillion and the government spending is around $400 billion, the $240 billion is a very big demand,” says Jun Zhang, Country Head-India, IFC.
The current government is offering business loans to small businesses. Forbes India put together a list of ’to dos’ to receive loan. It suggests that digitisation of the data helps in securing loans faster. Following is the list of loans:
Pradhan Mantri MUDRA Yojana (PMMY) provides loans upto INR 10 lacs.
Credit Guarantee Fund Scheme for Micro and Small Enterprises provides loans up to INR 20 crore.
National Small Industries Corporation Subsidy provides credit support upto INR 5 lakhs.
Credit Linked Capital Subsidy Scheme for Technology Upgradation provides discount on institutional credit.
SIDBI Make In India Soft Loan Fund For Micro, Small and Medium Enterprises (SMILE) provides loans of INR 25 lakhs and above.