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Micro and Small Enterprises Funding Scheme

Micro and Small Enterprises Funding Scheme

Micro and Small Enterprises Funding Scheme

As a measure to advance the productivity and competitiveness of Micro and Small Enterprises (MSE) and their organizations in the country, the Government of Tamil Nadu has initiated a measure known as the Micro and Small Enterprises Funding Scheme. The task of administering and implementing this scheme is entrusted to the Tamil Nadu Industrial Investment Corporation Limited (TIIC). Tamil Nadu Government provides financial assistance to New or Existing Units in Micro and Small Enterprises with an overall project outlay of Rs.50.00 lakhs under this MSE funding scheme. In this article, we will look at the Micro and Small Enterprises Funding Scheme in detail.

Know more about the Technology Bureau for Small Enterprises 

Objectives

  • To upgrade the infrastructural facilities in new or existing industrial areas of MSEs by providing financial assistance
  • For the Creation of Fixed Assets in Small Enterprises (MSE)
  • To improve the growth of Micro / Small Enterprises by developing the technology, skills, and quality, market access, access to capital,
  • To increase the potential of the MSEs by forming self-help groups, consortia, up-gradation of associations
  • To build facility centres for the testing, training centre, raw material depot, effluent treatment, complementing production processes, etc.

Eligibility Criteria

The eligibility criteria to obtain financial assistance under the Micro / Small Enterprises Funding Scheme are given here.

  • New Enterprises in Micro and Small-scale sector for the manufacture, preservation or processing of goods irrespective of location.
  • New Enterprises in Micro and Small-scale sectors for service sector projects like Hospitals, Fast Food restaurants, etc., except the Small Road Transport Operators [SRTOs].
  • Existing Micro and Small Scale Enterprises (MSE) Units in Tamil Nadu
  • Service Enterprises, undertaking Expansion, Modernization, Technology Upgradation and Diversification

Quantum of Assistance

The assistance under the Micro and Small Enterprises Funding Scheme is given here:

  • For New MSE Units, term loan 80% of Project cost subject to a maximum of Rs.40.00 lakhs will be considered.
  • For existing MSE units, a term loan of 75% of Project cost subject to a maximum of Rs.37.50 lakhs will be considered.

Project Cost

The project Cost of the unit will not exceed Rs.50.00 lakhs in case of a New Unit. In respect of existing MSE units, Project Cost, including the existing project outlay, will not exceed Rs.50.00 lakhs.

Promoter’s Contribution

The Minimum Promoter’s contribution to the Micro and Small Enterprises Funding Scheme is fixed at 20% of the project cost.

Debt Equity Ratio

The debt-equity ratio under Micro and Small Enterprises for new Units is 4.00: 1.00, and for existing units, it is 3.00: 1.00.

Repayment Period

The loan repayment period for the Micro and Small Enterprises Funding Scheme will not exceed six years, including a moratorium of 6 – 24 months.

Collateral Security

The collateral security offered for the Micro and Small Enterprises Funding Scheme will be stipulated as per the existing policy guidelines.

Rate of Interest

The interest for the Micro and Small Enterprises Funding Scheme will be charged on a compound basis at a monthly rest, besides the penal interest of 2.5% on the defaulted EMI for the defaulted period.

The details of the rate of interest are given in this document:

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Application Registration Fees

The applicant has to remit Registration Fees for Micro and Small Enterprises Funding Scheme at the time registration of the application.

Sl.No Loan Detail Registration Fees
1 Loans processed by Branch Sanction Committee (BSC) Rs.10000
2 Loan granted by Regional Level Sanction Committee (RLSC)  Rs.10 Lakhs
3 Loan by EC / Board at Head Office Rs.50000

Investigation Fees

The Investigation fees are inclusive of Registration Fees, and it requires to be paid by the applicant before the loan proposal is sanctioned in the respective sanction committee.

For more details, kindly visit the Tamil Nadu Industrial Investment Corporation Limited

Documents Required

Documents required for applying for the Micro and Small Enterprises Funding Scheme is explained in detail below:

  • Entrepreneur’s Memorandum
  • Firm Registration Certificate
  • Partnership Deed
  • Memorandum & Articles of Association
  • Certificate of Incorporation in Case of Companies
  • Copy of Bye-laws in case of Society
  • Bio-Data and Net-worth Statement in respect of each of the promoters, Directors and Guarantors
  • Important Educational and Technical Experience Certificate
  • Documents for KYC Compliance
  • Details of the Associate Concerns
  • Copies of the Audit Balance Sheet and Profit & Loss Account for the associate concern, along with schedules for the last three years
  • Audited Balance Sheet
  • Copy of Lease Deed or Purchase Agreement
  • Sale Deed, Parent Documents, Patta, Chitta, Adangal, Tax Receipt, FMB Sketch
  • Encumbrance Certificate
  • Approved Building Plan
  • NOC / Consent Order from the Pollution Control Board
  • Licenses like Drug License / EPCG License
  • Market tie-up letters

Micro and Small Enterprises Funding Scheme Application Procedure

The application procedure for the Micro and Small Enterprises Funding Scheme is explained step-by-step by procedure here:

Step 1: The entrepreneurs need to apply in the prescribed application form for the Micro and Small Enterprises Funding Scheme.

The application form for Micro and Small Enterprises Funding Scheme can be obtained from the Head Office or Branch Offices of the Corporation, or you can also download the application form the official website of TTIC. From the main page select Application form download option under the scheme.

Image 1 Micro and Small Enterprises Funding Scheme
Image 1 Micro and Small Enterprises Funding Scheme

The list of schemes application form will be displayed, click on Application for Financial Assistance for Industrial Units.

Image 2 Micro and Small Enterprises Funding Scheme
Image 2 Micro and Small Enterprises Funding Scheme

We have attached the application form for the Micro and Small Enterprises Funding Scheme.

TIIC-TL-APPLN-FORM-2-20

Step 2: Provide details in the application form with the following details and submit to the Head Office or Branch Office of Tamil Nadu Industrial Investment Corporation Limited.

  • Purpose of Loan
  • Amount Applied for
  • Unit Name
  • Size of the Unit
  • Constitution
  • Loan assistance required
  • Details of Management

Step 3: The prescribed authority will scrutinise the MSE funding application. The committee will examine the application for a loan and recommend concerned authority sanction.

Step 4: The authority will appraise the project both technically and economically with the approved project cost of TIIC.

After deposit of promoter contribution by the applicant and receipt of subsidy claim, the loan will be released to the applicant account.