13 December, 2024 | 19:01 IST
India is solidifying its position as one of the world’s leading startup destinations. Two Indian cities, Bengaluru and Mumbai, have made significant strides, earning spots among the top 50 startup cities globally in PitchBook’s latest rankings for the global Venture Capital ecosystem in 2024.
Prior to this, in March 2024, Prime Minister Narendra Modi had stated at the Startup Mahakumbh that India currently has the third-largest startup ecosystem in the world.
Despite these encouraging developments, the path for startup from ideation to execution often requires significant funding — a hurdle that many aspiring entrepreneurs struggle to overcome. To address this challenge, the Indian government has introduced several loan schemes aimed at empowering startups. Apart from the government schemes, the startup owners can also apply for loans through digital lending platforms like Moneycontrol for immediate needs. You can apply for loans up to Rs 15 lakhs through the Moneycontrol app and website in a 100% paperless process. The interest rates start at as low as 12% per annum.
Let’s take a look at some of these initiatives and how they are driving the entrepreneurial spirit across the country:
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The Pradhan Mantri MUDRA Yojana (PMMY) provides financial support to non-corporate, non-farm small and micro enterprises. Under the scheme, loans up to ₹20 lakh are available, with the limit increased from ₹10 lakh in the Union Budget 2024-25. Commercial banks, RRBs, small finance banks, MFIs and NBFCs are the channels through which loans are disbursed. The scheme offers four loan products: Shishu, Kishore, Tarun and Tarun Plus.
This scheme, launched by the Ministry of Finance, aims to support SC/ST and women entrepreneurs by facilitating bank loans for setting up greenfield projects across various sectors such as manufacturing, services, trading and agriculture-related activities. The scheme’s objective is to provide loans from ₹10 lakh to ₹1 crore to at least one SC or ST borrower, and one woman borrower, per bank branch, so that they can start a new business. In case the enterprise is non-individual, at least 51% of the shareholding and controlling stake should be held by either an SC/ST or Woman entrepreneur. A Rupay debit card is issued for convenience of the borrower. Beneficiaries also get support through a network of agencies engaged in training, skill development, mentoring, project report preparation, application filling, work shed / utility support services, subsidy schemes etc.
This scheme was launched by the ministry of MSME. For this, the ministry collaborated with SIDBI to establish the Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE). The goal of the scheme is to improve credit access for underserved and unserved segments of the MSE sector, enabling new and disadvantaged entrepreneurs to secure loans without needing collateral or third-party guarantees. As of April 1, 2023, the scheme has been expanded to offer collateral-free credit support of up to ₹5 crore to MSEs through CGTMSE’s network of member lending institutions.
The scheme provides credit guarantee for loans taken by DPIIT recognised startups from Member Institutions (MIs) of the scheme. The guarantee is provided through the National Credit Guarantee Trustee Company (NCGTC) to the MIs who provide loans to the startups. The scheme provides credit guarantee of up to ₹10 crore. The credit guarantee coverage can be either transaction-based or umbrella-based.
To apply for a government loan for your startup, first you can visit the concerned website of the scheme and learn more about the details and requirements. Next, you can visit the lender’s website and complete the loan application form online, uploading the required documents. Alternatively, you can visit the lender's physical branch to fill out the application form and submit the necessary documents in person for the scheme you want to apply for.
ALSO READ: How to Secure the Best Business Loan Interest Rate
Eligibility criteria for government loan schemes vary, but startups generally need to meet the following common requirements:
ALSO READ: Business Loan: Check steps to apply, eligibility and documents needed
Startup loans play a crucial role in helping entrepreneurs realise their business ambitions. Moneycontrol provides access to a wide range of loan offers. Applicants can easily enter their details, complete KYC, and set up EMI repayment, ensuring a swift and convenient process.
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