Laghu Udhyami Credit Card (LUCC)

Laghu Udhyami Credit Card scheme provides loan for MSME to meeting working capital requirements. The Laghu Udhyami Credit Card scheme is available in a wide variety of banks and can be applied for by eligible borrowers.

Eligibility Criteria

Under the Laghu Udhyami Credit Card scheme, all existing small borrowers - micro and small enterprises including artisan, village industries, professionals and self employed personnel are eligible. Retail traders are also eligible for the LUCC scheme. Further, eligible borrowers must have a satisfactory track record of dealing with banks for the last three years. Applicants dealing with banks for the last three years, but not having any loans are also eligible for the scheme.

Amount of Loan

Under the Laghu Udhyami Credit Card scheme a loan of upto Rs.10 lakhs is provided for a period of three years, subject to annual review. The loan is provided without any collateral whenever CGTMSE cover is available to eligible MSME units. In some cases, a third party guarantee may be required. The stock and receivable crated out of loan would be treated as primary security and insurance cover must be taken on the primary security created. Further, monthly stock statement and detailed annual stock statement must be submitted by the borrower for the stocks and receivables created out of the Laghu Udhyami Credit Card, if the loan amount sanctioned in above Rs.2 lakhs. For loan less than Rs.2 lakh, no stock statement need to be submitted.

Margin & Rate of Interest

The loan of upto Rs.25000, no margin is required. For any loan above Rs.25,000, a margin of 25% is required. The rate of interest for Laghu Udhyami Credit Card is as follows: Upto Rs.50,000 - 10.50% to 11.50% Rs.50,000 to Rs. 2 Lakhs - 12.5% to 13% Above Rs. 2 Lakhs to Rs. 10 Lakhs - 12% to 15.75% In addition to the above rate of interest, processing charges maybe levied on the loan as per the bank guidelines.

Download Laghu Udhyami Credit Card Application

Back to Learn

Frequently Asked Questions

Common questions about Laghu Udhyami Credit Card: Empowering MSMEs Nationwide.

The Laghu Udhyami Credit Card (LUCC) scheme provides loans for micro and small enterprises to meet their working capital requirements. It is a credit card facility offered by various banks to eligible borrowers.

All existing small borrowers, including micro and small enterprises, artisans, village industries, professionals, self-employed personnel, and retail traders, are eligible for the LUCC scheme. Applicants must have a satisfactory track record of dealing with banks for the last three years, or be new borrowers but have been dealing with banks for the past three years.

Under the LUCC scheme, a loan of up to Rs. 10 lakhs is provided for a period of three years, subject to annual review.

The loan is provided without any collateral whenever CGTMSE cover is available to eligible MSME units. However, in some cases, a third-party guarantee may be required.

The stock and receivables created out of the loan are treated as primary security, and insurance cover must be taken on the primary security created.

For loans above Rs. 2 lakhs, borrowers must submit monthly stock statements and detailed annual stock statements for the stocks and receivables created out of the LUCC loan. For loans less than Rs. 2 lakhs, no stock statement needs to be submitted.

For loans up to Rs. 25,000, no margin is required. For loans above Rs. 25,000, a margin of 25% is required.

In addition to the interest rates, processing charges may be levied on the loan as per the bank's guidelines.

Eligible borrowers can apply for the LUCC scheme through various banks that offer this facility. They may need to submit the required documentation and meet the eligibility criteria set by the bank.