Technology & Quality Upgradation (TEQUP) Support to MSMEs

The Small Industries Development Bank of India (SIDBI) is one of the financial institutions which promotes

Small, Micro and Medium Enterprises (MSMEs) with various schemes. One among the scheme is Technology & Quality Upgradation Support to MSMEs which aims to enhance the competitiveness of the MSME sector through the implementation of Energy Efficiency projects. To know about SIDBI Venture Capital

Objectives of the Scheme

The following are the various objectives of the scheme:

To provide financial help in the form of subsidy to the extent of 25% of the total project cost for the implementation of Energy Efficient Technology (EET). The maximum amount of subsidy is Rs. 10 Lakhs for the project that holds the cost of Rs. 40 Lakhs. This activity is implemented through various nodal banks.
SIDBI is the Nodal Agency under the scheme. Besides, Canara Bank, Bank of Baroda, Punjab National Bank, Bank of India and State Bank of India have also been included as Nodal Banks.
To provide subsidy to enterprises to the extent of 75% of the actual expenditure incurred by them for obtaining the Product Certification Licences. The maximum GoI assistance allowed per MSME unit is Rs. 1.5 lakhs for obtaining licences/marking to national standards and Rs. 2 lakhs for the obtaining international Certification.
To sensitize the MSME Sector through conducting Awareness Programmes to adopt Energy-Efficient Technologies and acquire Product Certification/Licenses from National/International Bodies.

Documents Required

The below following are the documents to be submitted while applying for the scheme:

Identity Proof: Aadhar, PAN Card, Driving License, Voter Identity Card, etc.
Address Proof: Aadhar Card, PAN Card, Valid Passport, Utility bill, Property tax bill, etc.
EET project completion certificate
Operation and performance reports/details
Any other document required by the bank

Eligibility Criteria

Any MSME who has filed a UAM (Udyog Aadhaar Memorandum) registration will be eligible for the support under this scheme.
The Detailed Project Report (DPR) has to be prepared and submitted by a Qualified Energy Manager or Auditor.
The installed EET machinery must have a minimum of 15% energy saving capacity, and the energy audit report also to be submitted (stating minimum of 15% energy saving capacity) at the time of submission of the subsidy application form.
The Government assistance to be used for the specified purpose. Subsidy not to be adjusted against defaults in repayments by the borrower.
If the subsidy is claimed based on the false information, then to refund along with the panel interest.

The below-listed entities are the eligible borrowers under this scheme:

Sole Proprietorships
Partnerships Firms
Private and Public Limited Companies under the MSME sector
Priority will be given to SC/ST and women entrepreneurs

Note: If the unit becomes non-operational within 2 years of the Government receipt of financial assistance, then the unit is liable to refund the money. Additionally, the industry will need to refund the financial assistance along with interest.

Application Procedure

The applicant must follow the below procedure to apply for the scheme in

SIDBI:

Step 1: The applicant has to apply for the sanction of loan for the project in SIDBI, banks or any financial institutions.

Step 2: After an appraisal of the Project from the applied institutions, the applicant will need to submit the loan application.

Step 3: In case if the loan application has not been submitted through SIDBI, then two copies of the application will be forwarded by the concerned Bank or Institution to SIDBI along with the proof of loan sanction letter and project viability report.

Step 4: SIDBI will submit the proposals to the Steering Committee for further approval. The Steering Committee will convey the decision to SIDBI with a copy to the applicant MSME for necessary action.

Step 5: Finally, after the loan sanction, the applicant will need to sign an agreement with the Bank or Institution sanctioning the loan in the prescribed format.

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Frequently Asked Questions

Common questions about Technology & Quality Upgradation Support for MSMEs in India.

The TEQUP scheme aims to enhance the competitiveness of the MSME sector by providing financial assistance for implementing energy efficiency projects and obtaining product certifications from national/international bodies. It also seeks to raise awareness about adopting energy-efficient technologies through awareness programs.

Any MSME unit that has filed a Udyog Aadhaar Memorandum (UAM) registration is eligible for support under this scheme. Priority is given to SC/ST and women entrepreneurs. The unit must also meet certain criteria, such as submitting a Detailed Project Report (DPR) prepared by a qualified energy manager and an energy audit report showing at least 15% energy savings.

The scheme provides a subsidy of up to 25% of the total project cost for implementing energy-efficient technology (EET), with a maximum subsidy of Rs. 10 lakhs for projects costing up to Rs. 40 lakhs. It also offers a subsidy of up to 75% of the actual expenditure incurred for obtaining product certification licenses, with a maximum of Rs. 1.5 lakhs for national standards and Rs. 2 lakhs for international certifications.

The Small Industries Development Bank of India (SIDBI) is the Nodal Agency for the TEQUP scheme. Additionally, several banks, including Canara Bank, Bank of Baroda, Punjab National Bank, Bank of India, and State Bank of India, have also been designated as Nodal Banks for the scheme.

Applicants must provide identity proof (such as Aadhaar, PAN card, or Voter ID), address proof (Aadhaar card, PAN card, utility bills, etc.), an EET project completion certificate, operation and performance reports/details, and any other documents required by the bank.

No, the TEQUP subsidy cannot be adjusted against defaults in loan repayments by the borrower. If the subsidy is claimed based on false information, the borrower must refund it along with penal interest.

The application process involves applying for a loan with SIDBI or other banks/financial institutions, submitting the loan application and project viability report, forwarding the application to SIDBI (if not applied through SIDBI), obtaining approval from the Steering Committee, and finally signing an agreement with the loan-sanctioning bank or institution.

If a unit becomes non-operational within 2 years of receiving financial assistance under the TEQUP scheme, it is liable to refund the entire amount along with interest.

Yes, the TEQUP scheme gives priority to SC/ST and women entrepreneurs while considering applications for financial assistance.

A Qualified Energy Manager or Auditor is responsible for preparing the Detailed Project Report (DPR) and the energy audit report, which must show a minimum of 15% energy savings capacity for the proposed energy-efficient technology. These documents are essential for applying for the TEQUP scheme.