Page 42 - Banking Finance August 2022

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assistance to startups upon verification of concept, MSME. Under this scheme, collateral-free loan up to
prototype development, product trials, market entry Rs 1 crore is provided to eligible startups and MSMEs.
and commercialization The scheme is expected to Now, the guarantee cover is available up to Rs. 5 lakhs.
support around 3,600 startups through 300 incubators.
(iv) Financial Support to MSMEs in ZED Certification
It is also proposed to create a corpus of Rs. 945 crore
Scheme - This covers both existing and new
which will be divided over the next 4 years for providing
manufacturing units under Zero Defect and Zero Effect
seed funding to startups through incubators in Tier 2
(ZED) mission with a view to create better products,
and Tier 3 towns which are often deprived of adequate
with high quality and zero defects which, in turn, aims
funding. It is planned to encourage innovators from rural
to embrace the world-class manufacturing processes,
entrepreneurs to come forward and benefit from this
and use of advanced technology.
scheme.
(v) Credit Linked Capital Subsidy for Technology Up-
(ii) Pradhan Mantri Micro Units Development and
gradation (CLCSS) - Under this scheme, the Government
Refinance Agency (MUDRA) Yojana- This provides
provides financial help to MSMEs to upgrade their
funds to banks for on-lending to micro-finance
technology and implement state of the art technological
institutions and non-banking financial institutions
platform for their business. The subsidy of 15 per cent
(NBFCs) at low rates. Loans up to Rs 10 lakh can be
is provided for investment up to Rs 1 crore for upgrading
availed under MUDRA scheme. It was launched in 2015
technology for startups and MSMEs. More than 7500
and within 2 years, more than 1.8 crore jobs were
products/services are covered under this scheme.
generated. Till August end, 2020, more than 67 lakh
(vi) Design Clinic for Design Expertise to MSMEs- In order
loans amounting to Rs 48,000 crores have been
to encourage and inspire small businesses to experiment
sanctioned under the MUDRA scheme. There are three
and try out new designs for their products, the
categories startups which include: (a) Shishu: This is for
Government has created a Design Clinic for inducing
new businesses being eligible for loans up to Rs 50,000.
design related expertise for startups and MSMEs. Under
(b) Kishor: This is for mid-aged businesses to get up to
this scheme, the Government provides the grant up to
Rs 5 lakh and, (c): Tarun: This is for existing &
Rs 60,000 for attending design seminars and up to Rs
experienced businesses to receive up to Rs 10 lakh can
3.75 lakh or 75 per cent of the cost of the seminar,
be availed. This MUDRA loan scheme also covers
wherein the entrepreneur can learn and implement
MSMEs such as Small Manufacturing Units, Retailers,
design theories and practices.
Wholesalers, Artisans etc.
(vii) Development of Portal- An online portal is created by
(iii) Credit Guarantee Trust Fund for Micro & Small
DPIIT which allows incubators to apply for funds. An
Enterprises (CGTSME) - This is one of the biggest
Experts Advisory Committee (EAC) has been created by
Startup loan schemes launched by the Ministry of
DPIIT to execute and monitor the Grant up to Rs 5 crore
offered to the eligible incubators selected by the EAC.
By availing the grant from the DPIIT, the selected
incubators provide loans to banks for on-lending to the
enterprise up to Rs 20 lakhs. Further, investment up to
Rs 50 lakhs is also provided to the startups for market
entry, commercialization, or scaling up through
convertible debentures or debt-linked instruments. The
promising startups that are supported at their early
stages, shall create huge employment opportunities for
everyone. The scheme also envisages to promote virtual
incubation for Startups by enabling incubators to
support startups from all corners of the country.
Towards this end, an Action Plan for Startup India is
already prepared by the Government in January 2021.
In the first meeting of the National Startup Advisory

42 | 2022 | AUGUST | BANKING FINANCE