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Bank Credit Facilitation Scheme

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Status: Active

Classification: Public Sector Scheme

Release Date(s):
4th June 2022
23rd December 2020

Offering: Loan/Credit

Entity Type: Central Government

Reading Time: 6 Mins

Ticket Size: Upto ₹5 Crores

Entity Name: National Small Industries Corporation

#Views: 50

Disclaimer….before you read ahead!

The information contained herein is of a general nature and for information purposes only, with the intent of raising awareness around various resources, schemes etc. available for women entrepreneurs in India. It is not intended to address the circumstances of any particular individual or entity. It does not purport to be all-inclusive or necessarily contain all the information that may be relevant for the reader, and may be subject to updation, revision or amendment. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to remain accurate in the future. The reader, therefore, is required to exercise their discretion; and not act on such information without appropriate professional advice after a thorough examination of the particular situation.

Furthermore, we are not a lender and are not authorized by the Reserve Bank of India to act as one. By disseminating the information contained herein, we are not soliciting any borrower or customers for the company or organization mentioned herein nor do we intend to syndicate any capital for the reader of this email.

 

About the scheme…

Bank Credit Facilitation Scheme was launched by National Small Industries Corporation (NSIC), a Government of India (GOI) Enterprise to meet the credit requirements of Micro, Small & Medium Enterprise (MSME) units in the country.

Under this Scheme, MSMEs can get access to finance from designated Financial Institutions (FIs) including Banks and NBFCs, based upon their lending policy. A focused attention is given to the credit proposals sponsored by NSIC.

 

How is it being implemented?

Under Bank Credit Facilitation Scheme, NSIC has entered into a Memorandum of Understanding (MOU) with various Nationalized & Private Sector Banks, and NBFCs. Through syndication with these FIs, NSIC facilitates MSMEs in accessing credit support (fund based or non-fund based limits) from these FIs.

 

What’s on offer?

Under this Scheme, NSIC, through its Financial Facilitation Centers (FFCs), assists MSMEs in:

  • Facilitating credit by having an integrated mix of various FIs
  • Providing an option for MSMEs to apply for a new FI or switch over of an account to a different FI
  • Assistance in completion of the documentation for submitting the proposals to FIs, submitting to FIs, and subsequent follow ups
  • Assisting MSMEs in getting liberal rate of interests from FIs after a favorable rating is awarded to MSME under Performance and Credit Rating Scheme of the Ministry Micro, Small and Medium Enterprises
  • Facilitating larger number of MSMEs who are desirous of availing credit
  • Providing handholding support to MSMEs

The handholding and other support, as mentioned above, is provided without any cost to the MSMEs.

Given below are the details of credit that is syndicated for MSMEs from FIs:

I. Product: 

  • Term loans
  • Working capital limits in the form of cash credit, overdraft against book debts and bill discounting facility
  • Non fund based limits such as guarantees, letter of credit, foreign bank guarantees, foreign letter of credit etc.

No limit has been prescribed on ticket sizes of loans and they will be based on the funding needs & requirements of MSMEs vis-à-vis Lender FIs assessment.

  • For MSMEs requiring working capital limits upto ₹5 Crores, requirement is envisaged to be assessed as 25% of the projected turnover for the next year and the working capital limit is envisaged to be 20% of the projected turnover. The balance is expected brought by promoters, by way of equity or loans, as their contribution
  • For working capital limits above ₹5 Crores, the working capital requirement is assessed under Maximum Permissible Bank Finance Method
  • It may also vary from FI to FI

II. Purpose:

  • Acquisition of fixed assets
  • Working capital requirements

III. Borrower Type

  • Per the Lender FI’s norms

IV. Security or Collateral or Guarantee or Insurance

  • Per the Lender FI’s norms

V. Interest Rate

  • Per the Lender FI’s norms

VI. Processing fee

  • Per the Lender FI’s norms

VII. Margin money requirement

  • Per the Lender FI’s norms

VIII. Tenure

  • For term loans, varies from 5-7 years in general. However, in exceptional cases, it may go up to 11 years
  • For working capital finance, limits are normally valid for one year and repayable on demand. Specific, self-liquidating loans are linked to the natural tenor of the transaction (bill finance, export credit etc.)

Interested? Read ahead to check your eligibility….

I. Are you setting up or running a Micro-enterprise or Small-enterprise or Medium-enterprise defined per MSMED Act, meaning Investment in Plant & Machinery or Equipment of your Enterprise does not exceed ₹50 Crores and Turnover does not exceed ₹250 Crores?

If your answers to the question above is an emphatic YES, you are all set to avail NSIC’s Bank Credit Facilitation Scheme!

 

So…how big is this scheme and what has been done so far?

I. Details don’t seem to be available in the public domain

 

So, now, how should you go about it?

I. Check the Lender FIs eligible for extending loans under this Scheme here to shortlist the FIs you are interested in availing loans from

II. Approach NSIC branch office nearest to you – https://www.nsic.co.in/Corporate/SearchBranch to submit a request for loan requirement from any of the eligible Lender FIs. The official sitting at the branch will provide handholding support to the MSME unit by assisting them in completing all documentation as required for further submission to the bank.

III. Alternatively, you may express your interest online here

OR

Send in your loan enquiries via e-mail to himanishali@nsic.co.in

We are not very clear as to how could you apply for this Scheme online despite there being a website in place to facilitate this – https://www.nsicffconline.in/Home

And list of guidelines in place – https://www.nsicffconline.in/Info/GFFFFC.pdf

IV. For information on indicative list of documentation requirement, click here

 

Go on then…and do spread the word!

 

Sources:

  1. About the Scheme 1
  2. About the Scheme 2
  3. About the Scheme 3
  4. FAQs on the Scheme
  5. Press Coverage on the Scheme: MSMEs looking for credit? NSIC will help you secure credit from SBI in these many days; no charges

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