Different schemes of National Small Industries Corporation

The National Small Industries Corporation or NSIC is a Public Sector Undertaking that comes under the Ministry of Micro, Small and Medium Enterprises (MSME) of India. NSIC was set up in 1955 by the government of India.

It aims to foster, encourage, and assist the growth of MSMEs in the country.  NSIC rolls out developmental and customised schemes to enhance the competitiveness of micro, small, and medium businesses in India. It also offers cohesive support services in finance, marketing, technology, and support.

Let us have a look at the fundamental functions of NSIC and its different schemes.

What are the Functions of NSIC?

• Provides financial aid to MSMEs through the hire-purchase scheme
• Provides advanced equipment on lease basis
• Helps in marketing campaigns of the small scale industries
• Provides training to the employees of small scale industries
• Assists in exporting goods and products of small scale industries
• Helps in up-gradation and development of technologies
• Promotes modernisation of the small scale industries
• Manufactures prototype machinery and equipment for small scale industries
• Purchase raw material and sell it to small scale industries at affordable rates

Different Schemes of National Small Industries Corporation

1. Bank Credit Facilitation

Bank Credit Facilitation scheme helps the MSMEs in getting credit support from banks. This support can be in both fund-based or non-fund based forms. NSIC has entered into an MoU (Memorandum of Understanding) with several Private Sector Banks and Nationalised Banks.

Along with it, NSIC also assists enterprises in submitting loan applications and following-up with the banks. Some of the banks that are a part of this scheme are Yes Bank, Federal Bank, IndusInd Bank, HDFC Bank, UCO Bank, State Bank of India, and Central Bank of India.

Key Features

• MSMEs can use term loans to procure fixed assets like land, building, machinery, and plant.
• These assets should play a crucial role in setting up new industrial units for modernisation, expansion, and diversification of the existing companies.
• Fund-based credit support includes working capital loans and term loans.
• Non-fund based credit support involves facilities like the letter of credit, guarantees, foreign letter of credit, and foreign bank guarantees.
• The security requirements and interests rates differ from banks to banks.

2. Raw Material Assistance Scheme

This scheme helps the MSMEs in purchasing raw material through advance or credit payment systems. It includes both imported and indigenous raw materials. Who is eligible to avail the benefit of this scheme?

MSMEs that have a UAM or Udyog Aadhar Memorandum can take advantage of Raw Material Assistance Scheme. This scheme provides an opportunity for the MSMEs to focus on manufacturing better quality products.

Key Features

• Materials facilitated under this scheme are supplied directly to the MSMEs at supplier rates, without involving the middlemen.
• Discounts received on bulk purchases are further shared with the MSMEs in the form of cash discounts. It helps in reducing the overall cost of the raw material. It is called Economics of purchases.
• The interest rate applicable to credit facilities ranges between 9.5% to 12%.
• Loans can be repaid within 90 days. However, enterprises can request to extend this duration.
• Single MSME units can take a loan up to Rs. 5 crores. However, a group of enterprises can avail a loan up to Rs. 15 crores.

3. Single Point Registration Scheme

SPRS is a progressive scheme of NSIC to help MSMEs flourish in India. Enterprises registered under this scheme can get full exemption from EMD (Earnest Money Deposit) in government tenders and purchases. It also allows the MSMEs to participate in all the government purchases through a single registration process.

Key Features

• Tenders issued to MSMEs will be free of cost.
• Enterprises will be exempted from paying EMD in government bids.
• Under this scheme, 358 categories of products are reserved by the Indian government. These goods will be purchased from small scale industrial units only.

4. Consortia and Tender Marketing

MSMEs face several issues while procuring big orders from the investors. This problem also stops them from competing with larger enterprises. NSIC came up with the Consortia and Tender Marketing Scheme to encourage these enterprises.

This scheme will help MSMEs in marketing their products and services either individually or collectively. NSIC forms a consortium of the enterprises that are in a similar product line and combines their capacity.

Now, NSIC will apply for the tenders on behalf of this consortia and secures order for it. The order is finally dispersed among all the participants in tune with their production capacity.

Key Features

• The scheme will aid in the security deposits and will offer EMD on a back-to-back basis.
• MSMEs that are registered for Single Point Registration Scheme are also eligible for this scheme.
• This scheme will allow the MSMEs to get orders in bulk.

5. Infomediary Services

Infomediary Services Scheme is a one-stop destination where all the information on technology, business, and finance are provided to the MSMEs. NSIC is offering this service through its MSME E-GLOBAL MART. It is a B2B and B2C complaint web portal that provides services on annual membership.

Key Features

• Provides unlimited global trade leads
• Facilitates information of all the National and Global tender notices
• It has the trust seal of NSIC.
• Provides an interactive database for MSMEs

6. Marketing Intelligence

The Marketing Intelligence scheme collects and analyses information to understand the needs of existing and potential customers. Apart from this, the plan also determines consumer preferences, attitude, and their buying behaviour. This scheme will utilise this information and encourage the growth of medium and small scale enterprises in India.

Key Features

• The scheme offers an up-to-date database of buyers for each product.
• It also provides a database of Indian exporters, international buyers, and technology suppliers to the enterprises.
• This scheme provides all the information on tenders rolled out by public and government sectors.

7. Technology Incubation – PPP Mode

NSIC aims to create employment opportunities for people who want to start their small business enterprise in the future. NSIC enters into franchise arrangements with the private companies that can set-up NSIC-TIC  (training-cum-incubation centres) at different locations across the nation. These training centres will work under the Public-Private Partnership (PPP) system.

Key features

• Incubation centres help in diversifying economies.
• They aim to commercialise the technology, build wealth and create new job opportunities.

8. Marketing Assistance Scheme

Marketing is one of the most crucial tools for any enterprise to promote its products and grow. Unfortunately, MSMEs do not have easy access to these marketing tools. Therefore, MSME in coordination with NSIC provides marketing support to medium and small scale enterprises under Marketing Assistance Scheme.

Key Features

• This scheme boosts the marketing effectiveness of MSMEs by educating them about advanced marketing tools.
• Marketing Assistance Scheme also aims to improve and enrich the marketing skills of MSMEs.
• This scheme offers a professional platform to MSMEs to interact with clients and buyers.

9. Aspire

India is currently facing difficulties in providing livelihood and employment in proportion to the population growth rate. The MSME sector can effectively address this issue by rolling out employment opportunities for economically weak candidates.

It can also motivate young entrepreneurs to set up their own business in the future. Aspire is a revolutionary scheme of NSIC that aims to meet these objectives.

Key Features

• Aspire is involved in creating job opportunities and reduce unemployment in the country.
• It aims for grass-root economic development.
• It facilitates business solutions to fulfil social needs of MSMEs.
• Aspire also Promotes innovation that strengthens the competitiveness of the MSME industry in India.

Takeaway

These were the different schemes of National Small Industries Corporation in India. NSIC’s prime motive is to develop micro, medium, and small enterprises in India. Market experts believe that the MSME sector has immense potential. And, the government of India is taking every possible step to boost its productivity. If you are also into the MSME sector, make sure you avail these schemes to optimise your business operations.

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4) What Would be a Good Government Policy to Encourage the Growth of Small Businesses?