Government Funding Schemes
India offers several government schemes to provide funding access for SMEs and MSMEs, including collateral-free loans, guarantees, subsidies, and seed funds. These initiatives support micro and small enterprises in manufacturing, services, and startups.
1. PMMY (Pradhan Mantri Mudra Yojana)
Best for small traders, service businesses, retail shops, micro manufacturers
Loan Range
➢ Shishu: up to ₹50,000
➢ Kishore: ₹50,000 – ₹5 lakh
➢ Tarun: ₹5 lakh – ₹10 lakh
Key Advantages
Collateral-free loans
Suitable for first-time entrepreneurs
Widely available through banks and NBFCs
2. PMEGP (Prime Minister’s Employment Generation Programme)
Best for new manufacturing or service businesses in semi-urban & rural areas
Subsidy
• 15%–35% margin money subsidy depending on category and location.
Project Cost Limits
➢ Manufacturing: up to ₹50 lakh
➢ Service: up to ₹20 lakh
3. CGTMSE (Credit Guarantee Fund Trust for Micro & Small Enterprises)
Best for existing SMEs needing higher funding but lacking collateral
Coverage
Provides credit guarantee to banks for loans typically up to ₹2 crore to micro and small
enterprises.
Major Benefit
No collateral required because the government guarantees a portion of the loan.
4. SISFS (Startup India Seed Fund Scheme)
Best for innovative, scalable startups (not traditional businesses)
Funding Support
➢ Up to ₹20 lakh for prototype/validation
➢ Up to ₹50 lakh for market entry and commercialization.
Eligibility Basics
• Startup must be DPIIT-recognized and focused on innovation.