Uco Udyog Bandhu Scheme

UCO bank operates various schemes to help entrepreneurs in setting up businesses with various types of credit and financial services. UCO Bank has a countrywide network of more than 3000 service units which comprises specialized and computerized branches in India and overseas. As on 31 March 2012, government share-holding in the bank was 84%, making it a nationalized bank.

UCO Udyog Bandhu

Under the Uco Udyog Bandhu Scheme, term loan, cash credit, composite loan or bank guarantee limit is provided to eligible entrepreneurs. Technically qualified, talented and well trained/experienced persons/persons with entrepreneurial capability including green horn entrepreneurs who running manufacturing and service enterprise under Micro and Small Enterprise are the preferred target group of this scheme.

Loan Amount

Fund based term loan or working capital of a minimum Rs.1 lakhs and upto Rs.5 crore can be provided under the scheme. In addition, 50% of the funds can be sanctioned as non-fund based working capital with an upper limit of up to Rs. 2 crore. The total fund based and non-fund based exposure must not exceed Rs. 7 crore.

Margin & Interest

20% margin from promoters is required under the scheme. Loan of upto Rs.10 lakhs can be sanction at base rate. Loan of Rs. 10 lakhs to Rs. 1 crore is sanctioned at base rate + 1%. Loans above Rs. 1 crore are sanctioned as per the internal rating of the banks, designed especially for MSME businesses. For women entrepreneurs, the interest rate will be 0.50% less than effective rate of interest. Nevertheless, the effective rate of interest after permitting concession of 0.50% must not fall below the bank base rate.

Collateral Security

Hypothecation of stocks, book debts and fixed assets created out of bank’s loan must be pledged. For loan under Rs.10 lakhs, no collateral or third party guarantee is required. But, CGTMSE scheme coverage is obligatory. For loan above Rs. 10 lakhs, collateral security in the type of mortgage of land and building (excluding agricultural land) or liquid security in the form of FD or NSC, surrender value of LIC is required. The security must be in the name of borrower or proprietor or partner or Director or Guarantor.

Loan Repayment

The maximum tenure for loan repayment period cannot not be in excess of 108 months not including moratorium period of duration of maximum 18 months.

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Frequently Asked Questions

Common questions about UCO Udyog Bandhu Scheme for Entrepreneurs in India.

The UCO Udyog Bandhu Scheme is a lending program offered by UCO Bank to provide financial assistance to eligible entrepreneurs for setting up or expanding their micro and small enterprises. Under this scheme, the bank offers term loans, cash credit, composite loans, and bank guarantees to technically qualified, talented, and well-trained individuals with entrepreneurial capabilities.

The UCO Udyog Bandhu Scheme targets technically qualified, talented, and well-trained individuals with entrepreneurial capabilities, including first-time entrepreneurs running manufacturing and service enterprises under the Micro and Small Enterprise sector.

Under the UCO Udyog Bandhu Scheme, fund-based term loans or working capital ranging from a minimum of Rs. 1 lakh to a maximum of Rs. 5 crore can be provided. Additionally, non-fund-based working capital up to 50% of the fund-based exposure, subject to a maximum of Rs. 2 crore, can also be sanctioned.

The UCO Udyog Bandhu Scheme requires a margin of 20% from the promoters. This means that the borrowers must contribute at least 20% of the project cost from their own sources.

The interest rate for loans under the UCO Udyog Bandhu Scheme varies based on the loan amount. Loans up to Rs. 10 lakhs are sanctioned at the base rate, while loans from Rs. 10 lakhs to Rs. 1 crore are sanctioned at base rate + 1%. For loans above Rs. 1 crore, the interest rate is determined based on the internal rating of the bank, specifically designed for MSME businesses.

Yes, the UCO Udyog Bandhu Scheme offers an interest rate concession of 0.50% for women entrepreneurs. However, the effective rate of interest after the concession must not fall below the bank's base rate.

For loans up to Rs. 10 lakhs, no collateral or third-party guarantee is required, but CGTMSE (Credit Guarantee Trust for Micro and Small Enterprises) scheme coverage is mandatory. For loans above Rs. 10 lakhs, collateral security in the form of a mortgage on land and buildings (excluding agricultural land) or liquid security like fixed deposits, National Savings Certificates, or the surrender value of life insurance policies is required.

The maximum repayment tenure for loans under the UCO Udyog Bandhu Scheme cannot exceed 108 months (9 years), excluding a moratorium period of up to 18 months.

Yes, the UCO Udyog Bandhu Scheme is applicable to both manufacturing and service enterprises under the Micro and Small Enterprise sector.

Yes, the UCO Udyog Bandhu Scheme is available through UCO Bank's countrywide network of more than 3,000 service units, which includes specialized and computerized branches in India and overseas.