Interest Subvention Scheme

Interest Subvention Scheme

Scheme Overview

Sponsoring Authority      :   MSME (Ministry of Micro, Small and Medium Entrepreneurs)

Effective Date                  :   02.11.2018 to 31.03.2020

Last date to apply           :   on half yearly bases i.e. 30th September and 31st March of every year

Objective :

The Scheme aims at encouraging both manufacturing and service enterprises to increase productivity and provides incentives to MSMEs for onboarding on GST platform which helps in formalization of economy, while reducing the cost of credit. The Scheme will be in operation for a period of two financial years FY 2019 and FY 2020.

Patten of Assistance:

• Interest of 2% per annum on outstanding balance from time to time from the date of disbursal / drawal or the date of notification of this scheme, whichever is later, on the Incremental or fresh amount working capital sanctioned or incremental or new term loan disbursed by eligible institutions.

Eligibility Criteria:

1. All MSMEs who meet the following criteria shall be eligible as beneficiaries under the Scheme:
   1. Valid Udyog Aadhar Number [UAN]
   2. Valid GSTN Number
2. Incremental term loan or fresh term loan or incremental or fresh working capital extended during the current FY viz. from 2nd November 2018 and next FY would be eligible for coverage.
3. The term loan or working capital should have been extended by Scheduled Commercial Banks or Non-Deposit NBFCs.
4. All working capital or term loan would be eligible for coverage to the extent of ₹100 lakh only during the period of the Scheme.
5. Wherever both the facilities working capital and term loan are extended to a MSME by an eligible institution, interest subvention would be made available for a maximum financial assistance of ₹100 lakh.

Who are eligible : All MSMEs manufacturing and service enterprise who meet the eligibility criteria

Release of Subsidy :  Disbursement against each claim is subject to receiving funds from MoMSME, GOI

Eligible sectors :  All MSMEs manufacturing and service enterprise who meet the eligibility criteria

Ineligible criteria:

1. MSME exporters availing interest subvention for pre-shipment or post-shipment credit under Department of Commerce will not be eligible for assistance under Interest Subvention Scheme for Incremental credit to MSMEs 2018.
2. MSMEs already availing interest subvention under any of the Schemes of the State / Central Govt. will not be eligible under the proposed Scheme.
3. MSMEs whose Incremental/fresh term loan or working capital was extended by Deposit accepting NBFCs.