MSME Term Loan Interest Rates of 2023
Published on : March 02, 2023

Micro, small and medium enterprises known as MSME in short are businesses started by independent entrepreneurs.  The definition of MSME was modified on 13th May 2020 by the Indian Government to include investment and annual turnover as criteria instead of only investment. The investment limit was also increased to include more enterprises within the threshold of MSME schemes.

Manufacturing and Services Enterprises are called –

Micro – When the investment does not exceed INR 1 crore and turnover doesn’t exceed INR 5 crore, the enterprise is called micro.

Small – An enterprise is deemed small when the investment doesn’t exceed INR 10 crore and turnover does not exceed INR 50 crore.

Medium – Medium enterprises are those where investment doesn’t exceed INR 20 crore and turnover does not exceed INR 100 crore.

Name of BankInterest Rate
Central Bank of India10.7%  onwards
Indian Bank10.00 % onwards
Punjab and Sind Bank10.60% onwards
State Bank of India9.60% onwards
UCO Bank8.40% onwards
United Bank13.45 % Onwards
HDFC Bank10.75% onwards

 Several NBFCs also offer MSME loans at various rates-

LendingKartRates as decided by lender
Fullerton India17% Onwards 
Mahindra FinanceRates as decided by lender
Muthoot FinanceRates as decided by lender
LoanTap18% onwards

 There are several other government schemes available for MSMEs.

Mudra Loan – This is a scheme offered for MSMEs under Pradhan Mantri Mudra Yojana.  Under the Micro-units Development and Refinance Agency scheme, borrowers can borrow from INR 50,000 to INR 10,00,000 on the basis of Shishu, Kishor and Tarun categories.

There are several sub-schemes like-

  • Micro-credit scheme
  • Refinance scheme for banks
  • Credit for micro-finance
  • Mahila Uddyami scheme
  • Mudra card
  • Equipment Finance scheme
  • Credit guarantee scheme

There are other government schemes available like –

Credit Guarantee Funds Trust for Micro and Small Enterprises

Prime Minister’s Employment Generation Programme

How to register for the MSME scheme

  1. You will need to click on https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm.
  2. Click on New Entrepreneurs who are not yet registered as MSMEs or those with EM-II.
  3. You will need to provide your name and Aadhaar details and get it validated to generate a one-time password that will be sent to your mobile number. 
  4. Use the OTP to authenticate your identity and provide details of your PAN, name of your enterprise etc and validate details
  5. You will need to provide personal details and industry details in the next step.
  6. Once all details are filled in, click on Submit and Get Final OTP which will be sent to your mobile number. You will need to enter this OTP which will confirm the successful registration of MSME.

MSME Loan from LoanTap

LoanTap offers MSME loans from INR 50,000 – INR 10,00,000 for tenures ranging from 12 to 36 months in less than 24 hours. You can use this loan to meet the working capital requirement of your business, buy new machinery,  meet business expenses or any other need that may crop up. The MSME loan terms and conditions are very simple at LoanTap.

To qualify for an MSME loan from LoanTap you will need to 

  • Be an Indian citizen or resident 
  • Be over the age of 21 years
  • Have filed the latest  Income Tax Returns 

 If you meet these requirements, congratulations! You can apply for an MSME loan from LoanTap.

Just download the LoanTap app on your smartphone and fill out an online application. You will need to upload the following documents –

  • PAN Card
  • Aadhaar Card
  • Income Proof
  • Bank Statement for the last 6 months
  • Income Tax Returns

Once the system verifies your documents, your loan is approved and the amount will be automatically credited to your account within 24 hours. You can foreclose the loan after 6 months without any prepayment penalty.

You can also use the LoanTap overdraft facility or credit line whereby you can get a preapproved loan amount that you can withdraw according to your needs. Interest will be charged based on the actual usage.

LoanTap MSME loans are quick, efficient, simple and seamless. What’s more, there is no physical paperwork and only minimal documentation to deal with. The entire process is online and you need not visit the lender even once.

Conclusion

LoanTap understands the funding needs of small entrepreneurs and endeavors to resolve these issues for them by providing convenient loans that can be repaid over 36 months. This can be a great relief to small business owners who may get stressed out due to fund shortages which could bring their ventures to a sudden halt. With LoanTap MSME loans around, you don’t have to worry about finances anymore. LoanTap MSME loans will help you carry out your daily operations in peace.

 What are you waiting for? Download the LoanTap app and enjoy the LoanTap advantage.