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Look no further. This page contains all the information you will need on Subsidy Linked Schemes for MSME Business Loans offered by Bank of India.

Bank of India Subsidy Linked Schemes for Business Loans

Bank of India offers three Subsidy Linked Schemes to MSMEs, viz:

  1. Prime Minister Employment Generation Programme (PMEGP)
  2. Deendayal Antyodaya Yojana – National Urban livelihood Mission (NULM) – Self-employment Programme (SEP) for Individual Enterprises (NULM-SEP-I)
  3. Deendayal Antyodaya Yojana – National Urban livelihood Mission (NULM) – Self-employment Programme (SEP) for Group Enterprises and Self-help Groups (NULM-SEP-G)

We look at each in some detail.

Prime Minister Employment Generation Programme (PMEGP)

Features of Prime Minister Employment Generation Programme (PMEGP)

This scheme provides subsidy to MSME units involved in Manufacturing and Services sectors sanctioned under PMEGP. The Prime Minister Employment Generation Programme (PMEGP) is designed to help generate employment in rural as well as urban areas.

Why this Scheme?

  • The borrower can enjoy subsidies on loans for Capital Expenditure; i.e. loans used for setting up of projects in the Manufacturing and Services sectors
  • There is no income ceiling for assistance for setting up MSME projects under the PMEGP scheme
  • This scheme is reserved for new projects sanctioned under PMEGP

Loan Amount

  • The maximum loan amount sanctioned for this loan is 90% of the total project cost for beneficiaries in the General category and 95% of the total project cost for beneficiaries in the Other categories
  • The total project cost cannot exceed Rs. 25 lakh for units in the Manufacturing space and Rs. 10 lakh for Service sector businesses

Interest

  • The interest rate will be as per existing guidelines
  • It should be noted that specific interest rate for this loan is not mentioned on the bank’s website

Repayment

  • These loans need to be repaid in 3 to 7 years
  • There is no mention of any repayment moratorium on Bank of India’s website

Security Needed

  • Eligible units must be covered under CGTMSE

Eligibility

  • The borrower should be above the age of 18 years
  • The beneficiary who wants to set up projects costing more than Rs. 10 lakh in the Manufacturing and Rs. 5 lakh in Service sector must have an education qualification of passing Class VIII
  • Only new projects sanctioned under PGMEP can avail this scheme
  • Self-help Groups including those under BPL who have not availed subsidies under other schemes are also eligible

Borrower Contribution to Total Cost (Margin Money)

  • The borrower may have to cover 15% to 35% of the project cost depending on the location of the project/unit

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank will cover the rest.

Other features to Know

  • This is a term loan
  • Negative list of activities is not permitted
  • There is no income ceiling for assistance for setting up projects under PMEGP
  • The applicant must have received approval under PMEGP for the project before applying for this scheme

Deendayal Antyodaya Yojana – National Urban livelihood Mission (NULM) – Self-employment Programme (SEP) for Individual Enterprises (NULM-SEP-I)

Features of Deendayal Antyodaya Yojana – National Urban livelihood Mission (NULM) – Self-employment Programme (SEP) for Individual Enterprises (NULM-SEP-I)

This NULM scheme provides interest subsidy to individuals classified as urban poor for setting up gainful self-employment ventures or micro enterprises best suited to their skills, aptitude and local conditions. This is a term loan where the interest rate charged by the bank above 7% is available as subsidy.

Why this Scheme?

  • The borrower can enjoy subsidies on loans for interest rate over and above 7% charged on the loan
  • The borrower does not have to pay margin for loans up to Rs. 50,000
  • No minimum qualification is required to avail this loan when setting up a self-employment venture or micro enterprise

Loan Amount

  • The maximum loan amount is Rs. 2 lakh

Repayment

  • These loans need to be repaid within 7 years including the moratorium
  • The repayment moratorium for this loan is 6 months

Security Needed

  • This loan is covered under a suitable guarantee coverage for SEP loans as per eligibility. It is decided by Bank of India on a case-to-case basis

Eligibility

  • The borrower should be between the ages of 18 years and 70 years
  • The borrower should belong to the urban poor category
  • While there is no minimum qualification to avail this loan, if the Small Enterprise or Self-employment Venture required a special skill then the bank verifies the qualification at the time of application

Borrower Contribution to Total Cost (Margin Money)

  • Loans up to Rs. 50,000: NIL
  • Loans Above Rs. 50,000: The bank chargers anywhere from 5% to 10% margin on this loan. The actual margin is decided on a case-to-case basis

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank will cover the rest.

Deendayal Antyodaya Yojana – National Urban livelihood Mission (NULM) – Self-employment Programme (SEP) for Group Enterprises and Self-help Groups (NULM-SEP-G)

Features of Deendayal Antyodaya Yojana – National Urban livelihood Mission (NULM) – Self-employment Programme (SEP) for Group Enterprises and Self-help Groups (NULM-SEP-G)

This NULM scheme provides interest subsidy to groups of urban poor including Self-help Groups for setting up gainful self-employment ventures or micro enterprises best suited to their skills, aptitude and local conditions. This is a term loan where interest rate above 7% charged by the bank is available as subsidy.

Why this Scheme?

  • The groups can enjoy subsidies on loans for interest rate over and above 7% charged on the loan
  • The group does not have to pay margin for loans up to Rs. 50,000
  • No minimum qualification is required to avail this loan when setting up a self-employment venture or micro enterprise

Loan Amount

  • The project cost is Rs. 2 lakh per member or Rs. 10 lakh for the whole group, whichever is lower
  • The Bank of India loan granted will be either the difference between the project cost and the contribution of group members or four times the groups’ savings, whichever of the two options is lower

Repayment

  • These loans need to be repaid in up to 7 years including the moratorium
  • The repayment moratorium for this loan is 6 months

Security Needed

  • This loan is covered under a suitable guarantee coverage for SEP loans as per eligibility. It is decided by the bank on a case-to-case basis

Eligibility

  • The group should have at least 3 members
  • The ages of group members should be in the range of 18 to 70 years
  • At least 70% of the group members should belong to the urban poor category
  • While there is no minimum qualification to avail this loan, if the Small Enterprise or Self-employment Venture requires a special skill then the bank verifies the qualification at the time of application
  • Self-help groups formed by differently-abled persons are allowed to avail this scheme if they have at least 5 members instead of the 10 prescribed. It may be noted here that this point even though mentioned by Bank of India runs contrary to the primary eligibility criterion that says only a minimum of 3 members are required in the self-help group to avail this scheme

Borrower Contribution to Total Cost (Margin Money)

  • Loans up to Rs. 50,000: NIL
  • Loans Above Rs. 50,000: The bank chargers anywhere from 5% to 10% margin on this loan. The actual margin is decided on a case-to-case basis

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank will cover the rest.

Service Charges

  • Loans up to Rs. 5 lakh: The bank does not levy service charges on Working Capital Loans or Term Loans for loan amounts of up to Rs. 5 lakh

Documents Needed for Individuals

  • Loan Application Form duly filled and signed by the applicant and co-applicant, if any
  • Two Passport Size Photographs of applicant and co-applicant
  • Personal ID Proof: Aadhaar Card, PAN Card, Passport or Driving License. PAN Card/ PAN Card Issuing Letter is must
  • Signature Proof: PAN Card, Banker’s Verification, Driving License or Passport
  • Residential Address Proof (Any One): Aadhaar Card, Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income/Banking Proof: Last 6 months Bank Account Statement of applicant and co-applicant, Loan Statement of Running Loans, Latest Closed Loan NOC, Net Worth of the applicant and co-applicant
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • A4 size copies of the aforementioned documents

Documents Needed for Proprietorship and Partnership Firms

  • Loan Application Form duly filled and signed
  • Partnership Deed and Partnership Registration Certificate
  • ID Proof of the Firm: Firm PAN Card or PAN Issuing Letter
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income Proof: CMA Data and Project Report, Debtors and Creditors Certificate, GST Return, Last 3 years ITR of applicant and co-applicant, Audited or CA Certified Computation of Income/Trading Account/Profit and Loss Account/Balance Sheet, Annual Audit Report and Tax Audit Report if audited, Form 16A if applicable, Net Worth of applicants, co-applicants and guarantors
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Partnership’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References
  • All A4 size copies of the aforementioned documents

Documents Needed for Private Limited and Public Limited Companies

  • Application Form duly filled and signed
  • Company ID Proof: Company’s PAN Card
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Business Proof: AOA and MOA, Company Incorporation Certificate, Business Commencement Certificate, Board Resolution, CA/CS verified Share Holding Pattern, ROC Annual Return, DIN Certificate, List of Directors on Company Letter Head, GST Number, Form 32 in case of Director Change
  • Income Proof: CMA Data and Project Report, Last 3 Years ITR Acknowledgement copy of Company and all Directors, Last 3 Years Annual Credit Report or Tax Audit Report with Article 3CB, Article 2D, Article 3CD, TDS Certificate/Form 16A, Net Worth Certificate
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Company’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References
  • All A4 size copies of the aforementioned documents

Reference Facts

  • Bank of India Website: www.bankofindia.com and www.bankofindia.co.in
  • Headquarters: Mumbai, Maharashtra
  • Call Centre Toll-Free Number: 1800 220 229, 1800 103 1906