MSME finance · Guide
MSME Loan Schemes in India (2026 Guide)
Last updated: 18 September 2026
A plain-English walkthrough of the main government schemes that support MSME borrowing — what each one is, who qualifies, and how the application actually works.
India runs several central government schemes designed to get credit to micro, small and medium enterprises. Some provide the loan itself, some provide a guarantee so a lender can fund you without collateral, and one is simply a common portal for applying. They are not alternatives to a bank — in almost every case the money still comes from a bank or NBFC, and the lender still assesses your business on its merits.
The sections below explain each scheme, who it is for and how to apply. Scheme terms are revised from time to time, so treat every figure as something to verify on the official portal on the day you apply. We are a loan consultancy and assist customers in applying with banks and NBFCs; we are not a government body and cannot sanction or guarantee any loan.
Pradhan Mantri MUDRA Yojana (PMMY)
MUDRA is the government's scheme for funding small, non-farm businesses through banks, NBFCs and microfinance institutions. It is aimed at the smallest end of the enterprise spectrum — shops, small manufacturing units, service providers, repair outlets, transport operators and similar owner-run businesses. Loans are categorised into stages that broadly track the size and maturity of the business, so a first-time micro enterprise and an established small unit are treated differently. The loan itself comes from the lender; MUDRA provides the framework under which it is extended.
Who is eligible
Indian citizens running, or setting up, a non-farm income-generating business in manufacturing, trading or services. Both new and existing businesses are covered, and proprietorships and partnerships are the most common applicants. Applicants should not be defaulters with any bank or financial institution.
How to apply
Apply at any participating bank branch, or through the Udyami Mitra portal, with your KYC, business proof, bank statements and a brief plan or quotation for what the money will be used for. Existing account holders often find their own bank the quickest route.
Verify before publishing
Loan amount: category-wise limits are set by the scheme and revised from time to time — check the current figures on the official portal before you apply.
Official portal: mudra.org.in
CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)
CGTMSE is not a loan — it is a guarantee. The trust covers a portion of the lender's loss if a micro or small enterprise loan goes bad, which allows banks and NBFCs to lend without insisting on collateral or third-party security. For a business owner with a viable enterprise but no property to pledge, this is often the single most useful scheme available. The lender applies for the cover; the borrower usually pays a guarantee fee that is built into the cost of the loan.
Who is eligible
Micro and small enterprises in manufacturing or services, new or existing, borrowing from an eligible lending institution. Some activities — retail trade and educational or agricultural activities among them — have historically been treated differently, so confirm current coverage for your line of business.
How to apply
You do not apply to CGTMSE directly. You apply to a bank or NBFC for the loan and ask them to route it under the guarantee cover. The lender assesses the proposal on its own merits first and then lodges the guarantee application.
Verify before publishing
Guarantee cover and fee: the cover percentage, ceiling and annual guarantee fee are set by the trust and revised periodically — confirm the current structure on the official portal.
Official portal: cgtmse.in
PMEGP (Prime Minister's Employment Generation Programme)
PMEGP is a credit-linked subsidy scheme for setting up new micro enterprises. A portion of the project cost is met by a government subsidy, the promoter contributes their own share, and the balance comes as a bank loan. Because it is a subsidy scheme rather than a straight loan, it is targeted at new units that generate employment, and it is administered through KVIC, State Khadi Boards and District Industries Centres alongside the lending bank.
Who is eligible
Individuals above the prescribed minimum age setting up a new unit, along with self-help groups, trusts and registered societies. Existing units and units already benefiting from certain other subsidy schemes are generally not eligible. Educational qualification requirements apply above a certain project cost.
How to apply
Apply online through the PMEGP e-portal with your project report, KYC and qualification documents. The application goes to a district-level task force for approval, and the sanctioned case is then routed to a bank for the loan.
Verify before publishing
Project cost ceiling, subsidy rate and promoter contribution vary by category, location and applicant type — confirm all three on the official portal.
Official portal: kviconline.gov.in
Stand-Up India
Stand-Up India facilitates bank loans for greenfield enterprises promoted by Scheduled Caste, Scheduled Tribe and women entrepreneurs. 'Greenfield' means a first-time venture in manufacturing, services, trading or the agri-allied sector — the scheme is not for taking over or expanding an existing business. Every eligible bank branch is expected to support such borrowers, and the scheme includes hand-holding support for preparing the proposal.
Who is eligible
SC/ST or women entrepreneurs above the prescribed minimum age, setting up a new enterprise, holding majority control of the business. Applicants should not be in default with any bank or financial institution.
How to apply
Register on the Stand-Up India portal, which routes your application to the lead district manager, a connect centre or a bank branch, depending on how much support you need. You can also approach a bank branch directly with your project report.
Verify before publishing
Loan range and promoter contribution are prescribed under the scheme — confirm the current figures on the official portal.
Official portal: standupmitra.in
PSB Loans in 59 Minutes
This is a common online portal rather than a scheme in its own right. A business fills in one application, and the platform reads GST data, income tax returns and bank statements to generate an in-principle approval from participating lenders — the headline being that this happens within about an hour. An in-principle approval is not a sanction: the actual sanction, documentation and disbursal still go through the chosen bank's normal process and timelines.
Who is eligible
Businesses with GST registration, filed income tax returns and at least six months of bank statements available in a readable format. The platform is built around businesses that already have a digital paper trail, so cash-heavy or unregistered units usually fit it poorly.
How to apply
Register on the portal, connect or upload your GST, ITR and bank statement data, choose a lender from the offers generated, and then complete the formalities at that lender's branch.
Verify before publishing
Eligible loan size and processing fee depend on the lender making the offer — the portal shows the applicable figures with each in-principle approval.
Official portal: psbloansin59minutes.com
Scheme Comparison at a Glance
Use this to narrow down which route fits your situation. Amounts, subsidy rates and guarantee cover are published and revised by each scheme, so we point you to the official portal rather than quoting figures that may be out of date.
| Scheme | Best for | Collateral | Subsidy | Amount / rate |
|---|---|---|---|---|
| MUDRA (PMMY) | Small owner-run non-farm businesses | Generally not required | No subsidy | As published on mudra.org.in |
| CGTMSE | Running micro & small units with no security | Replaced by guarantee cover | No subsidy; fee applies | As published on cgtmse.in |
| PMEGP | New micro enterprises creating employment | Per bank norms | Credit-linked subsidy | As published on kviconline.gov.in |
| Stand-Up India | First-time SC/ST & women-led ventures | Per bank norms | No subsidy | As published on standupmitra.in |
| PSB Loans in 59 Minutes | GST-registered, digitally documented firms | Depends on lender offer | No subsidy | Shown with each lender offer |
Scheme figures change with government notifications. Always confirm the current amount, subsidy and fee on the official portal on the day you apply.
How MoneyMax Fingrow Can Help
Knowing a scheme exists and getting a bank to sanction under it are two different problems. Most MSME applications stall not because the business is weak, but because the file arrives incomplete, goes to a lender whose current appetite does not match the case, or is scattered across several banks at once — which leaves a trail of enquiries on the credit report and weakens every later application.
We review your registrations, GST filings, banking conduct and credit history, tell you which route is realistic, help prepare the project report and document set, and then assist you in applying with the banks and NBFCs on our panel whose criteria your file actually fits. The sanction, the rate and the amount are decided by the lender — we do not promise approval, and nobody honestly can.
Find out which scheme fits your business
Tell us about your enterprise and what you need the funds for. We will come back with the routes worth pursuing.