Simplify your loan requirements with the Composite Loan Scheme

In the early stages of a business, MSMEs often find the need to apply for loans in order to fund their processes. Sometimes they have to apply for two separate loans to fund working capital requirements and long term projects. Needless to say the hassle of applying for two separate loans can be avoided by applying for a single loan, i.e. the Composite Loan Scheme.


The Composite Loan Scheme allows an MSME to apply for a single loan to fund working capital requirements and long term projects instead of two separate loans.


How does an MSME benefit from this scheme?

An MSME can avail of composite loans up to 75% of the value of the project or ₹ 25 lakh, whichever is lower.

Eligibility Criteria

What is the eligibility criteria for this scheme?

Those projects with a debt to equity ratio of 3:1 in the total venture of outlay (i.e., cost of the project plus working capital requirement) after taking into account the amount of investment/subsidy/incentive available for the project are eligible to apply for this scheme.


How can an MSME apply for this scheme?

An MSME can apply for this scheme offline by approaching banks and state finance corporations.

An MSME can apply for this loan online here.

General Conditions

What are the general conditions under this scheme?

The following are the general conditions under this scheme:

  1. Working Capital loan should be availed within one year from the date of commencement of production.
  2. The unit should open a current account with a designated bank and the amount of Working Capital of the loan will be credited as and when disbursed by the Corporation.
  3. Support for preparation of DPR up to 0.5% of the project cost or ₹1 lakh whichever is lower. This support will be given subject to the fact that the project is sanctioned by NABARD. The grant amount would be within the overall cap of 20% stated above.
  4. The unit should route its entire transaction of the  business including all the receipts and payments through this account only.
  5. Exclusive grant support for taking forward SHGs/farmers’ clubs/producer groups to the stage of having a Producers Organization. Separate scheme would be formulated for this purpose when need arises for such a support.
  6. The unit should repay the entire Working Capital loan sanctioned by the Corporation at once in case the unit approached the bank for more Working capital.
  7. Working Capital Component should be repaid over a period not exceeding 10 years (including moratorium up to 13 years) and the term loan Component over a period not exceeding 8 1/2 years (including moratorium of 18 months).
  8. The unit should provide monthly stock statement showing the position of inventory level of the Corporation. If they fail to provide the same, the Corporation may recall the loan.
  9. Any other support felt necessary for enabling a Producers Organization function in a better and profitable manner subject to the recommendation of ED Committee and with the approval of Chairman/MD.

For further information on this scheme, please click here.

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