MSME Loan Scheme 2025

There are two ways of sending in your application for an MSME loan. If the lender has an online facility, you can fill in the form with the required details and submit the application via the website. 

Alternatively, you can visit the nearest branch and request an application form. You can call ahead and ask them what the documentation requirements are. 

New Definition of MSMEs

The definition of MSME was altered and was announced by the Government of India on 13th May 2020. Given below is the new definition of MSME:

1. The criteria for MSME classification have been changed from Investment to Investment and Annual Turnover.
2. The Government of India also increased the investment limit for classification of MSME units. This means, that more firms and enterprises can now avail MSME schemes.
3. Criteria for the classification of MSMEs is now uniform for Manufacturing and Services Enterprises which is given below in the table below:

Micro, Small, and Medium Enterprises can avail MSME loans for the expansion of businesses or for setting up new enterprises. The interest rates on MSME loans start at 8.25% p.a. The loan amount sanctioned ranges from as low as Rs.50,000 and can go up to a few crores. On the basis of the sanctioned loan amount, the loan repayment tenure can go up to 15 years.

MSME Loan Interest Rates by Major Banks in 2025

What are the Eligibility Criteria for Availing an MSME Loan?

1. Indian citizen aged 18+

1. Engaged in manufacturing, trading, or services

1. Meets investment & turnover limits as per MSME classification

1. Good credit score and financial stability

What Documents are Required to Apply for an MSME Loan?

1. PAN, Aadhaar, address proof

1. Business registration & financials

1. Income tax returns

1. Bank statements

1. Project report (if applicable)

NBFCs Offering MSME Loan Interest Rates

There are various Non-Banking Financial Companies (NBFCs) in India who offer MSME Loans to its customers at attractive interest rates. Given below are some of the NBFCs from whom you can avail an MSME Loan.

Popular NBFCs Offering MSME Loans in India

Listed below are some of the most popular NBFCs in India which offer MSME loans:

Lendingkart MSME Loan Features

1. Interest Rate - 1.25% per month
2. Processing Fee - 2%-5%
3. Loan Amount - Rs.50,000 to Rs.2 crore
4. Loan Repayment Tenure - Up to 36 months 

Other MSME Loan Schemes

In addition to the loan schemes offered by the banks and NBFCs, there are a host of government schemes as well. These schemes have been listed below:

MSME Registration

Given below are the steps you will have to follow to register for MSME as a new user

1. Click on the link given https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm.
2. If you have not registered before, click on 'New Entrepreneurs who are not Registered yet as MSME or those with EM-II'.
3. You will have to provide your name and Aadhaar details and click on 'Validate and Generate OTP'. A One-Time Password (OTP) will be sent to your mobile number. Enter the OTP to authenticate. You will then have to provide the details of your PAN, organisation you are a part of and validate it.
4. In the next step, provide your personal details and the details of the industry or plant you are a part of.
5. After entering all the details, click on 'Submit and Get Final OTP'. An OTP will be sent to your mobile number. Enter the OTP following which you will receive a message for the successful registration of MSME.

Udyam Registration Process for Existing UAM Holders

1. If you have already registered as an UAM then you will have to click on the link https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm.
2. Click on either 'For those having registration as UAM' or 'For those already having registration as UAM through Assisted filing'.
3. Enter your Aadhaar number.You can choose to receive the OTP either on your registered mobile number or email ID.
4. Once you have provided the OTP, click on and 'Validate and Generate OTP'.
5. Enter the OTP and your registration process will be completed.

Collateral for MSME Loan

Most of the lenders in India will offer you an MSME loan without you having to provide any collateral or security. MSME loans are considered unsecured loans for which collateral is not required. However, in case any lender does ask for a collateral, do get in touch with them and ask for the details of the security you may need to provide.

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