Here’s everything you need to know about it.
The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India, on November 2, 2018, had announced an "Interest Subvention Scheme for MSMEs", the nodal agency of implementation for which is the Small Industries Development Bank of India (SIDBI).
This Scheme aims at encouraging manufacturing, service and trading enterprises to increase productivity by providing incentives to MSMEs for onboarding on GST platform, by reducing the cost of credit.
According to the scheme, the interest relief will be calculated at two percentage points per annum (2% p.a.), on outstanding balance from time to time from the date of disbursal /drawal or the date of notification of this scheme, whichever is later or on the incremental or fresh amount of working capital sanctioned or on incremental or new term loan disbursed by ABFL during the eligible period.
Incremental term loan or fresh term loan or incremental or fresh working capital which has been extended during the period - 1st October, 2019 to 31st March, 2020, would be eligible for coverage.
The term loan or working capital should have been extended by Aditya Birla Finance Limited.
In order to ensure maximum coverage and outreach, all working capital or term loan would be eligible for coverage to the extent of Rs.100 lakh disbursed only during the period of the Scheme.
Wherever both the facilities - working capital and term loan are extended to a MSME by ABFL, interest subvention would be made available for a maximum financial assistance of Rs.100 lakh.
MSME exporters availing interest subvention for pre-shipment or post-shipment credit under Department of Commerce will not be eligible for assistance under Interest Subvention Scheme for Incremental credit to MSMEs 2018.
MSMEs already availing interest subvention under any of the Schemes of the State / Central Govt. will not be eligible under the proposed Scheme.
The loan accounts on the date of filing claim should not have been declared as NPA as per extant guidelines in force. No interest subvention shall be admissible for any period during which the account remains NPA.