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It is essentially an agreement or a memorandum of understanding between two parties – the National Small Industries Corporation (NSIC) and several private and national banks in India.
Such an agreement is drawn to help small and medium enterprises meet their credit requirements and access business loans from both private and national banks. Under this scheme, MSMEs can receive required assistance with a loan application, documentation, and other formalities.
Note that every registered and government-recognised business, be it a small, medium or micro enterprise, is eligible for this facilitation scheme. However, they must have a KYC compliant account to avail a loan under this scheme.
The Bank Credit Facilitation Scheme offers the following salient benefits:
Following are the objectives of the scheme
All registered businesses are eligible for a Bank Credit Facilitation Scheme, whether the business is a micro, small, or even medium one. As long as the enterprise ID is registered and recognized by the Government, it can apply for a Bank Credit Facilitation Scheme.
The major highlights of the scheme are given below:
You can apply for any of these business loans under this scheme
The loans under this category can take the form of overdraft facility against book debt, bill discounting services, and open cash credits.
This type of loan category includes guarantees like foreign bank guarantees, letter of credits, and credit letter. To benefit from this credit facility, entities need to open a credit account that allows account holders to withdraw cash within a pre-set credit limit.
You can apply for long-term, mid-term, or short-term loans based on your requirement and repayment capability. Generally, enterprises apply for this loan to purchase equipment or meet other large-scale expenses essential to set up an enterprise or its expansion.
The documents that have to be submitted differs depending on the purpose of the loan. The general reports are
You can apply for this bank credit facility by following these steps
Step 1 – Go to the NSIC’s official website
Step 2 – Look for the application form
Step 3 – Download and print the form
Step 4 – Provide essential details to fill up the form
Step 5 – Submit the duly filled form along with all the essential documents
Micro enterprises are those manufacturing units in which the total actual value of machinery & plant is up to Rs 25 lakhs.
It is a service enterprise whose original investment value of the equipment is up to a maximum of Rs. 10 lakhs.
Small Enterprises are those manufacturing units in which the total actual value of machinery & plant is above Rs 25 lakhs but below Rs 500 lakhs.
It is a service enterprise whose original investment value of the equipment is up to a maximum of Rs. 200 lakhs but above Rs 10 lakhs.
Medium Enterprises are those manufacturing units in which the total actual value of machinery & plant is above Rs 500 lakhs but below Rs 1000 lakhs.
It is a service enterprise whose original investment value of the equipment is up to a maximum of Rs. 500 lakhs but above Rs 200 lakhs.