Interest Subvention Scheme for MSMEs 2019

In the Union Budget 2019, Union Minister of Finance informed that under the interest subvention scheme, Rs. 350 crore would be allotted to all GST registered Micro, Small and Medium Enterprises (MSMEs) for fresh and incremental loans.

Goal of the Scheme

To provide Rs. 1 crore loans in 59 minutes to all GST registered MSME sector through a separate online portal to enhance loan access.

Objective of the Scheme

To enhance credit access for all GST registered MSME sector
To increase productivity and foreign investments
To provide support for technology upgradation
To increase employment opportunities and
To encourage MSME sectors to use GST platforms by providing incentives

Interest Subvention Scheme

The Ministry of MSME implemented interest subvention scheme for MSMEs from 2018-2020. This scheme plays an important role by proving credit loans for MSMEs to boost and influence export growth and maintain day-to-day expenses. GoI allotted Rs. 6000 crore to support this scheme and it will be distributed through hubs/online portals. For information on Interest Subvention Scheme, click here.

Benefits of the Scheme

GoI provides 2% interest subsidy per annum for all GST registered MSMEs
Scheme extended for the year 2019-20 for all fresh, incremental or working capital loans
GoI provides interest subvention up to maximum financial assistance of Rs.100 lakh

Eligibility for the Scheme

The MSME should have a valid Udyog Aadhar Number (UAN) and GSTN Number The term loan or the incremental loan should have been extended by the commercial banks scheduled by the RBI. Note: This scheme is not applicable for exporters who have availed credit through the Department of Commerce for pre-shipment or post-shipment To apply for UAN or GSTN, click here.

Interest Calculation

The interest is calculated at 2% per annum on the availed loaned amount for this scheme. For read detailed information on interest calculation, half-yearly claims, nodal agency click here.

How to Claim

The MSMEs can claim the subsidy through Small Interest Development Bank of India (SIDBI) with a fee of 0.25% per annum. The eligible MSMEs should fill the following forms and should be submitted in the following format:

Annex-I

Annex-I form is used to mention the half-yearly claim through this scheme. The sample copy of Annex-1 is provided below: Annexure-1

Annex-1

Annex-II

Annex-II form is used to provide the branch wise details and a soft copy should be submitted in excel format. Sample of Annex-II is produced below: Annexure-2

Annex-2

Annex-III

Annex-III form should be provided by the concerned MSME to the Controlling branches or Head Offices for the compilation of data by the branches. The Haly yearly claims can be submitted to the Chief General Manager, Institutional Finance Vertical, SIDBI and the funds can be collected after released from MoMSME. For more details on annexure forms, click here.

Documents Required for the Scheme

Annex-I, Annex-II, Annex-III forms
Certificate from statutory auditors of the eligible institutions (should include verification of accounts with regard to amount, incremental or fresh lending, the interest charged and the amount claimed)
Details of PAN card, Aadhar card of the applicant
Utility bill and Property tax bill
Trade Licence
Ownership documents
Copy of the partnership deeds or MOA
Copy of IT returns for the three financial years
Statement of capital and loan expenditure

The scheme would be operated by the SIBDI and monitored by an Additional Secretary and Development Commissioner from the MoMSME. To know more on how to avail this scheme and documentation for the scheme, click here.