The Government of India offers various credit schemes to support small traders, farmers, and startups. These schemes are designed to provide financial assistance to promote entrepreneurship and economic growth. Below are details of some prominent credit schemes:
PMMY offers collateral-free institutional credit through Member Lending Institutions (MLIs), including Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs), and Micro Finance Institutions (MFIs).
Eligible individuals with a business plan can avail loans under this scheme for income-generating activities in manufacturing, trading, services, and allied agricultural activities. There are four loan products:
The Stand Up India Scheme aims to provide loans between ₹10 lakh and ₹1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and one woman borrower per bank branch. These loans are designed to support the establishment of greenfield enterprises in manufacturing, services, or trading sectors, including allied agricultural activities.
Both PMMY and SUPI offer financial assistance for trading, allied agricultural activities, and new business ventures.
As per the Union Budget 2025-26, a new scheme will be launched to assist 5 lakh women, Scheduled Castes (SC), and Scheduled Tribes (ST) first-time entrepreneurs This scheme will offer term loans up to ₹2 crore over the next five years, incorporating lessons from the Stand Up India Scheme. Additionally, the scheme will include online capacity building for entrepreneurship and managerial skills.
Introduced in 1998, the Kisan Credit Card (KCC) scheme helps farmers access timely and affordable credit for agricultural inputs like seeds, fertilizers, and pesticides, as well as cash requirements for crop production and allied activities. In 2019, KCC was extended to cover working capital requirements for allied activities such as Animal Husbandry, Dairy, and Fisheries.
Under the Modified Interest Subvention Scheme (MISS), the government provides an interest subvention of 1.5% to banks for short-term working capital loans up to ₹3 lakh at 7% per annum. A 3% Prompt Repayment Incentive is also offered for timely repayment, reducing the effective interest rate to 4%. In the Union Budget 2025-26, the loan limit under MISS has been increased from ₹3 lakh to ₹5 lakh for loans under the KCC scheme.
The Jan Samarth portal is a digital platform that links 15 government-sponsored loan and subsidy schemes. It enables a quick and efficient process for applying for loans and obtaining approvals based on digital evaluations. Many banks and financial institutions have also developed online platforms and mobile apps to facilitate end-to-end digital processing of loan applications, minimising the need for physical paperwork and in-person visits.
These government schemes offer significant support to small traders, farmers, and entrepreneurs, helping them access the financial resources needed to grow their businesses and contribute to the economy.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks; read all the related documents carefully before investing.
Published on: Mar 26, 2025, 12:08 PM IST
Sachin Gupta
Sachin Gupta is a Content Writer with 6+ years of experience in the stock market, including global markets like the US, Canada, and Australia. At Angel One, Sachin specialises in creating financial content that simplifies complex market trends. Sachin holds a Master's in Commerce, specialising in Economics.
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