NSIC, which stands for National Small Industries Corporation, is a government body set up by the micro, small and medium scale industry ministry. It was formulated in 1955 to assist and act as the governing body for MSME. There are several schemes offered by NSIC like the Single Point Registration, Performance & Credit Rating, and National SC-ST Hub, to name a few. Its operation is spread countrywide and has several nodal departments and technical centres in Chennai, Howrah, Hyderabad, New Delhi, Rajkot, Rajpura, Ramnagar, and Aligarh. Having developed the required skill set in small-scale enterprises, consultancy services have been provided for other developing nations for the last five decades.
Did you know?
To obtain the NSIC certificate, MSMEs are required to fill out the application form and submit it along with required documents to the respective NSIC's zonal or branch offices located nearest to the enterprise.
NSIC or National Small Industries Corporation is a public sector undertaking, an ISO 9001:2005 certified enterprise under the Ministry of Micro, Small and Medium Enterprises of the Government of India.
NSIC concentrates on fostering and supporting micro, small, and medium enterprises by supporting them with integrated support services involving finance, technology, marketing, etc. NSIC also promotes tailor-made schemes, thus boosting the competitiveness, diligence, and growth of the MSMEs and resulting in the overall progress of the country’s economy.
The NSIC scheme fosters and supports the growth of micro, small and medium-sized enterprises throughout the country. They are spread out countrywide with many technical centres and offices, and they also have a training cum incubation centre taken care of by a trained workforce.
What is an NSIC Certificate?
NSIC certificate is an important document given to MSME (micro, small and medium enterprise). This enables them to buy government and credit rating schemes required for small scale industries for a single point of registration.
What Is the Difference Between NSIC and MSME?
NSIC is National Small Scale Industries Corporation. It was set by the Government of India in 1955 and is a public sector undertaking. NSIC was found to aid and promote the growth of small and micro-scale industries and organisations in India.
MSME is a micro, small or medium enterprise. It is a body set up to form rules, laws, and regulations related to micro, small and medium industries.
Banks/NBFCs Interest Rates Under NSIC Scheme – 2022
Under Raw Material Assistance, NSIC offers a lending rate ranging from 7.5% to 9% to MSME under the Bank Guarantee Scheme. For this purpose, NSIC has signed an MOU (Memorandum of Understanding) with leading private sector banks, non-banking financial institutions, and Nationalized banks. To assist with the credit needs of MSME units, NSIC has tie-ups with the banks so that MSMEs can carry on with their business undertakings. The interest rate may vary depending on the significance of the industry. The company’s reliability, stability, and viability play a major role here.
Having branch offices and technical centres countrywide and good networking, NSIC provides a wide range of services like core training, incubation, and financial assistance. The main support area includes technology, marketing, finance, and other services. NSIC also assists in furnishing the required machinery for hire/purchase basis and marketing under the export category.
Below is the list of Banks offering Credit facility Schemes under NSIC.
- Axis Bank
- Bank of Maharashtra
- Corporation Bank
- Canara Bank
- Federal Bank
- HDFC Bank
- Indian Bank
- IndusInd Bank
- Jammu and Kashmir Bank Ltd
- Kotak Mahindra Bank
- Oriental Bank of Commerce
- Syndicate Bank
- The South Indian Bank
- Tamilnad Mercantile Bank Ltd
- UCO Bank
- Yes Bank
Many more banks are coming forward and negotiating a tie-up with NSIC as they want to have MSMEs as their customers. NSIC also works on getting credit ratings from firms like Crisil and Fitch as a good rating with promoting the MSME in getting loans at concessional rate. It is mainly required as MSMEs always have challenges raising high equity capital and do not have sufficient collateral requirements. This is when NSIC comes to their aid.
Eligibility, Fees & Charges
The majority of the corporations in India are dependent on NSIC for financial assistance, which helps in the growth of various sectors like education, housing, agriculture, export, etc., including a wide list of small and micro industries. For loan amounts less than ₹10 lakhs, collateral is not required, and it is also not required if the MSME has had a good performance track for a considerable number of years.
Below mentioned are the eligibility criteria for easy facilitation of loan from the bank to MSME:
- Turnover of MSMEs should be in the range of ₹5 crores to ₹250 crores.
- The sector or organisation should be in the business for a minimum of the last 3 years.
- The comprehensive details related to the business, their service, and finished goods have to be provided to the banks under the provision of collateral for cash credit loans.
- If the enterprise had availed of loans previously, the repayment record would be checked.
- Acceptable CIBIL rating.
Under the MSME scheme, the guidelines mandate that banks shouldn’t accept any collateral if the loan amount is ₹10 lakhs. The upper limit can be raised to ₹25 lakhs if the enterprise depicts a fabulous track record.
Mandatory Documents Required
To avail NSIC loans for the financial aid of MSME, the following documents have been stipulated:
- Duly filled application form with passport-sized photographs.
- Identity, address, age, income, and business address proofs
- Liability and asset statement of promoters, guarantors, directors, etc., with the latest filed income tax returns.
- Lease deed or rental agreement if business premises are rented/leased
- Copy of SSI registration certificate / Entrepreneurs Memorandum
- Profile of the Unit – Name and location of promoters, experience, nature of the business, address of all offices/plants, shareholding pattern, etc.
- The last 3 year’s annual report with ST and IT returns.
- Projected balance sheet for the next 2 years
- CMA data in the prescribed format if the limit required is ₹100 lakhs and above
- Position of accounts with existing bankers
- Comprehensive project report for term loan requirements
- Quotations, estimation, approved building plan, etc.
- Document in support of Trust Deed / Partnership Deed / Memorandum and Articles of Association / Rules & Bye-laws / Certificate of Incorporation, etc.
- Clearance from Pollution Control Board
- Clearance from Electricity Board and other statutory authorities
Month-wise production and sales data for the current financial year, the value of stock in process, finished goods, debtors, creditors, etc.
Features and Benefits of NSIC
- Once the MSME is registered under NSIC, it is easier to obtain loans via private and public sector banks.
- NSIC aids in the promotion and growth of the priority sector.
- It is easier for the industries and sectors to balance transfers between banks.
- NSIC acts as a mentor to the MSMEs and facilitates an easy documentation process.
- NSIC guides the MSMEs and assures them the best interest rates from the banks they apply for loan.
- Obtaining loans is easier for MSMEs due to the guidance of NSIC.
- Acts as a consultant, advisor, and support to MSMEs
To conclude, NSIC has been paving the path for many budding entrepreneurs by providing major guidance in training them with appropriate skills, technology, and on-job training, assisting them in managing funds with low-interest rates, and providing practical knowledge in setting up small scale industries. Several training centres have been set up in various towns and cities to encourage people in rural areas to set up small industries. NSIC acts as a mediator between small-scale industries and other government agencies to procure raw material at a concessional rate, thus aiding the small and micro industries in surviving and thriving in the competitive business market. This has led to huge economic development in India.
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