In India, many talented people with small incomes dream of starting their own businesses. To support these dreams, the government has introduced special loan schemes. These schemes are designed to help lower income families by providing them with financial support, training, and other resources they need to succeed in business.

IN this guide, we’ll explore some of these government schemes, like the Pradhan Mantri Mudra Yojana (PMMY), MSME Loan Scheme, Stand-Up India, SIDBI Loan Schemes, and the Vishwakarma Scheme. These schemes are like helping hands for budding entrepreneurs, offering them loans, guidance, and opportunities to grow their businesses.

By understanding these schemes’ features, eligibility criteria, and application processes, lower income families can take a big step towards achieving their business goals. This guide aims to simplify these concepts and provide actionable information for those looking to start or expand their businesses with government support.

which way to get business loan for lower income families

Many schemes have been run by the Government of India under which even lower families can take loans for business. Let me tell you about the scheme run by the government.

Scheme Name	Key Features
Pradhan Mantri Mudra Yojana	– Provides microcredit or loans to income-generating micro-enterprises. – Loan categories: Shishu (up to ₹50,000), Kishore (₹50,000 to ₹5 lakhs), Tarun (₹5 lakhs to ₹10 lakhs).
MSME Loan Scheme	– Financial assistance to micro, small, and medium enterprises. – Loan amounts based on investment/turnover classification: Micro, Small, Medium.
Stand-Up India	– Facilitates bank loans between ₹10 lakh and ₹1 crore for greenfield enterprises. – Target beneficiaries include SC/ST and women entrepreneurs.
SIDBI Loan Schemes	– Various finance schemes for MSMEs, including term loans, green finance, machinery loans, and more. – Loan amounts ranging from ₹10 lakh to ₹25 crore.

1.Pradhan Mantri Mudra Yojana (PMMY):

1. What is PMMY?
   • PMMY is a flagship scheme launched by the Government of India.
   • It aims to provide microcredit or loans to income-generating micro-enterprises in the non-farm sector.
   • These enterprises can be involved in manufacturing, trading, or service-related activities, including those allied to agriculture (such as poultry, dairy, and beekeeping).
2. Loan Categories:
   • PMMY offers loans under three categories:
     • Shishu: Covers loans up to ₹50,000.
     • Kishore: Covers loans above ₹50,000 and up to ₹5 lakhs.
     • Tarun: Covers loans above ₹5 lakhs and up to ₹10 lakhs.
3. Eligibility:
   • Individuals, proprietary concerns, partnership firms, private limited companies, and other legal forms are eligible.
   • Applicants should not be defaulters to any bank or financial institution and should have a satisfactory credit track record.
   • Necessary skills/experience/knowledge related to the proposed activity may be required.
4. Lending Institutions:
   • Loans are provided by Member Lending Institutions (MLIs), including:
     • Public Sector Banks
     • Private Sector Banks
     • State-operated cooperative banks
     • Micro Finance Institutions (MFIs)
     • Non-Banking Finance Companies (NBFCs)
     • Small Finance Banks (SFBs)
     • Other approved financial intermediaries.
5. Interest Rate and Charges:
   • Interest rates are determined by the MLIs based on Reserve Bank of India guidelines.
   • Upfront fees/processing charges may apply, but Shishu loans usually have waived charges.
6. Application Process:
   • Apply online with necessary documents (ID proof, address proof, photograph, etc.).
   • Keep away from agents posing as MUDRA representatives.

Remember, PMMY aims to empower small entrepreneurs and boost economic growth.

2.MSME Loan Scheme:

1. What is the MSME Loan Scheme?
   • The MSME Loan Scheme provides financial assistance to micro, small, and medium enterprises.
   • These loans can be used for various purposes, such as setting up new businesses, expanding existing ones, or upgrading technology.
2. Eligibility Criteria:
   • MSMEs are classified based on their investment in plant and machinery or annual turnover.
   • Here’s the classification:
     • Micro: Investment up to ₹1 crore and annual turnover up to ₹5 crore.
     • Small: Investment up to ₹10 crore and annual turnover up to ₹50 crore.
     • Medium: Investment up to ₹50 crore and annual turnover up to ₹250 crore.
3. Types of Expenses Covered:
   • MSME loans can be used for:
     • Acquiring land, factories, or constructing buildings.
     • Purchasing plant and machinery, including lab equipment and furniture.
     • Meeting working capital needs (raw materials, stock-in-progress, finished goods).
     • Trade finance (bill discounting).
     • Launching new products, expanding business, or warehousing.
     • Marketing and advertising expenses.
4. Application Process:
   • You can apply online through various lenders, including banks, non-banking financial companies (NBFCs), small finance banks (SFBs), and fintech platforms.
   • Keep your budget and necessary documents ready for a smooth application process.
5. Interest Subsidy:
   • The government offers an interest subvention scheme to boost productivity.
   • MSMEs with valid GSTIN numbers can avail of this relief option.

3.Standup India

1. What is Stand-Up India?

Stand-Up India is a government initiative launched to coincide with the 125th birth anniversary of Dr. Babasaheb Bhimrao Ambedkar.

The scheme recognizes the challenges faced by Scheduled Caste (SC), Scheduled Tribe (ST), and women entrepreneurs in setting up enterprises, obtaining loans, and accessing other necessary support for business success.

2. Key Features:

Loan Facilitation: Stand-Up India facilitates bank loans between ₹10 lakh and ₹1 crore for greenfield enterprises.

Target Beneficiaries: At least one SC/ST borrower and at least one woman borrower per bank branch can avail of these loans.

Enterprise Sectors: The eligible enterprises can be in manufacturing, services, agri-allied activities, or the trading sector.

Shareholding Requirement: In the case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by either an SC/ST or woman entrepreneur.

3. Application Process:

You can access loans through the following channels:

• Directly at a Bank Branch: Visit your nearest bank branch to apply.
• Through Your Lead District Manager: Seek assistance from the Lead District Manager.
• Online Application: Apply via the portal Stand-Up Mitra.

4. Hand-Holding Support:

The scheme offers hand-holding services to guide entrepreneurs through the process.

Rupay Debit Card: Beneficiaries receive a Rupay debit card for financial transactions.

5. Inclusivity:

While Stand-Up India primarily targets SC/ST and women entrepreneurs, other MSMEs are also welcome to participate.

Some handholding services may be exclusive to Stand-Up India beneficiaries.

4.SIDBI Loan Schemes:

• What is SIDBI:
  • SIDBI aims to provide financial assistance and promote the growth of MSMEs in India.
  • It facilitates loans, credit, and other financial products to boost entrepreneurship and economic development.
• Loan Schemes:
  • SIDBI offers a range of finance schemes with varying loan amounts and repayment tenures:
    • Term Loans: Swift approval process for new customers in manufacturing and service sectors. Loan amount up to ₹1 crore with a tenure of up to five years.
    • Green Finance Loan: Attractive interest rates for eco-friendly projects.
    • MSME Loans: Quick sanctions for working capital and business expansion.
    • Machinery Loans: Minimal paperwork for acquiring machinery and equipment.
• Eligibility:
  • MSMEs, including startups, can apply for SIDBI loans.
  • Loan amounts can range from ₹10 lakh to ₹25 crore.
• Application Process:
  • Apply online through the SIDBI portal or visit your nearest bank branch.
  • SIDBI provides customised solutions based on your business needs.

5. Vishwakarma Scheme

1. What is Vishwakarma Yojana?
   • The Vishwakarma Yojana is a government initiative launched to empower artisans and craftsmen who work with their hands and tools.
   • These traditional artisans, collectively known as “Vishwakarmas,” include blacksmiths, goldsmiths, potters, carpenters, sculptors, and more.
2. Objective:
   • The scheme provides holistic and end-to-end support to Vishwakarmas.
   • Key components include training, technology, credit, and market support.
3. Eligibility:
   • Vishwakarmas engaged in various occupations are eligible to benefit from this scheme.
   • The goal is to uplift their skills, enhance livelihoods, and promote entrepreneurship.
4. Components of Vishwakarma Yojana:
   • Training and Skill Development: Artisans receive training to improve their craftsmanship and business skills.
   • Financial Assistance: Collateral-free loans are provided for setting up or expanding their businesses.
   • Market Support: Assistance in connecting with markets and buyers.
   • Technology Upgradation: Access to modern tools and techniques.
5. Application Process:
   • Interested applicants can apply online through the official Vishwakarma Yojana portal.
   • Necessary documentation related to the proposed activity may be required.
6. Financial Support:
   • The program offers flexible loans tailored to the specific needs of artisans.
   • Loan terms and interest rates are designed to support sustainable growth.

Documents Required

• Passport-size photographs (usually two)
• KYC documents (PAN card, passport, Aadhar card, etc.) any one.
• Bank statements (last 1 year)
• Income Tax Returns (ITR) for self-employed individuals
• Copy of business incorporation (Certificate of Incorporation, if applicable)

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Conclusion

In conclusion, several government schemes in India offer business loans to lower income families, including the Pradhan Mantri Mudra Yojana (PMMY), MSME Loan Scheme, Stand-Up India, SIDBI Loan Schemes, and the Vishwakarma Scheme. These schemes aim to empower small entrepreneurs by providing financial assistance, training, market support, and technology upgrades, thereby contributing to economic growth and livelihood enhancement in the country. If you are a lower income family looking to start or expand a business, exploring these government schemes could be a significant step towards achieving your entrepreneurial goals.