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Learn about how the Bank Credit Facilitation Scheme helps Micro, Small, and Medium Enterprises (MSMEs) access credit and the key advantages it provides.
The Bank Credit Facilitation Scheme, facilitated by National Small Industries Corporation (NSIC), is designed to help MSMEs access the credit they need to grow and expand. This initiative is part of NSIC's collaboration with various nationalised and private sector banks.
The scheme provides an integrated solution for MSMEs to access loans, either from new or existing banks, based on their requirements. By leveraging NSIC’s network, MSMEs can gain access to fund-based and non-fund-based credit limits without the burden of high application fees or complex procedures. Additionally, the scheme offers valuable handholding support to guide MSMEs through the application process.
The Bank Credit Facilitation Scheme helps simplify the MSME loan application process, making it more accessible and efficient for MSMEs.
Here are some key features and benefits of the scheme:
Facilitates credit to MSMEs through collaborations with nationalised and private sector banks
Provides MSMEs the option to apply for loans from new banks or switch accounts to a different bank
Offers handholding support, assisting MSMEs with document completion and submission
Streamlines the process to reach a larger number of MSMEs, promoting broader access to credit
No cost is charged to MSMEs for applying under the scheme
Fosters a supportive environment for MSMEs by following up with banks and ensuring smooth loan processing
By collaborating with a diverse panel of financial institutions, this scheme provides MSMEs with a competitive marketplace of options, significantly improving the odds of securing credit on favorable terms.
The Bank Credit Facilitation Scheme provides various types of loans and credit facilities to meet the diverse needs of MSMEs. These options help businesses access the necessary funds for expansion, working capital, or other financial requirements.
Here are the primary loan and credit facilities available under the scheme:
These MSME loans are for acquiring fixed assets such as land, buildings, machinery, and equipment. They are available for both new units and existing units seeking expansion, modernisation, or diversification.
These include open cash credit, overdraft against book debts, and bill discounting facilities to meet the day-to-day operational needs of MSMEs.
Includes guarantees, letters of credit, foreign bank guarantees, and foreign letters of credit, catering to businesses that require support for international transactions or risk mitigation without direct funds.
To apply for the Bank Credit Facilitation Scheme, MSMEs must meet certain eligibility criteria. These guidelines help ensure that the units seeking credit are in a position to utilise the funds effectively for growth.
The following are key eligibility requirements:
The business must be classified as an MSME unit as per the guidelines set by the government
The applicant must have a valid Udyam Registration
The business must be involved in manufacturing, processing, or service-based activities
The applicant must have an operative bank account that is KYC-compliant
The business must provide a detailed profile, including the nature of its activity, experience, and shareholding pattern
The MSME unit must provide financial documents, such as balance sheets, income tax returns, and other relevant documents as requested by the bank
To apply for the Bank Credit Facilitation Scheme, MSMEs need to submit various documents. These documents help banks assess the financial health and legitimacy of the business.
The required documents vary based on the type of loan being applied for but generally include the following:
Document Category |
Specific Documents Required |
Identity Proof |
Government-issued ID (e.g., Aadhaar, PAN card) |
Address Proof |
Utility bills, rental agreement, or lease deed |
Business Address Proof |
Rent agreement or lease deed |
Financial Documents |
Asset and liability statement of promoters, guarantors, and directors with income tax returns |
Last three years' balance sheets with IT returns |
|
Projected balance sheet for the next two years |
|
Business Registration |
Copy of Udyam Registration (for MSME classification) |
Business Profile |
Details about promoters, business activity, shareholding pattern, etc. |
Project Report |
Required for term loan applications |
Statutory Compliance Documents |
Clearances from Pollution Control Board, Electricity Board, and other relevant authorities |
Miscellaneous |
Partnership Deed/Trust Deed/Rules & Bye laws/Articles of Association |
Rent agreement, Lease deed, or other documents as per the bank’s checklist |
To apply under the Bank Credit Facilitation Scheme, MSMEs should follow these steps:
Visit nearest NSIC branch office and submit loan request for any of the banks under the NSIC tie-up agreement
NSIC officials will assist in completing all necessary documentation as per the bank's checklist
Once the documentation is complete, the application will be forwarded to the selected bank for processing.
NSIC will also provide follow-up support to ensure the application progresses smoothly with the bank
Yes, the Bank Credit Facilitation Scheme offers MSMEs the option to switch their bank accounts. Under the scheme, MSMEs can apply to a new bank or transfer their existing account to a different bank, depending on their business needs. This provides greater flexibility and helps MSMEs select the bank that best suits their credit requirements.
Yes, the Bank Credit Facilitation Scheme provides non-fund-based limits as part of its offerings. These include guarantees, letters of credit, and foreign bank guarantees, which can help MSMEs manage international transactions and reduce financial risks without directly receiving funds.
The loan repayment period under the Bank Credit Facilitation Scheme varies depending on the type of loan and the bank’s policies. Generally, term loans for asset acquisition have longer repayment periods, while working capital loans may have shorter repayment terms. The exact period will be specified by the bank upon loan approval.
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