The scheme aims to provide financial assistance by Term loan to existing MSME units who want to undertake expansion/modernization/capital expenditure in the same line of business by way of purchase of land, construction of factory building, purchase of equipment, plant & machinery, miscellaneous fixed assets, installation of rooftop solar projects, and acquisition of other energy efficiency devices. This scheme is valid up to 31st March 2022 and may be extended on a need basis.
Eligible Criteria:
- Financial assistance shall be provided to Micro, Small, and Medium Enterprises engaged in high growth and priority sectors (including sunrise sector) and thrust sectors for undertaking expansion/modernization/capital expenditure.
- Brownfield enterprises having a minimum of 2 years of operation and audited accounts for at least two full years are eligible under the ARISE scheme.
- There must be cash profits in the last audited financial results.
| List of Eligible Sectors under ARISE Scheme | ||
|---|---|---|
| Automobiles (excluding dealership) | Automobile Components (including general Engg.) | Medical Equipment, healthcare, hospitals, and nursing homes, diagnostic centers |
| Chemicals and Chemical Products | Paper & Paper Products (including Printing) | Renewable Energy including Rooftop Solar Projects |
| Electronic Systems | Electrical Machinery | Rubber and Plastic |
| Food Processing | Textile and Garments | Ceramics and Stone Processing |
| Iron and Steel | Drugs and Pharmaceuticals | Biotechnology |
| Aerospace & Defence | ||
- MSMEs setting up projects in other sectors may also be allowed under the scheme, subject to the approval of the RO In-charge.
Quantum of Assistance:
- Term loan up to Rs. 500 Lakh per borrower, subject to a maximum of 80% of the project cost.
- For smaller loans up to Rs. 3 crore for machinery/equipment finance, 100% of the project cost shall be allowed.
- Higher term loan for plant & machinery, purchase of land, construction of factory building, etc., up to Rs. 700 Lakh per borrower can be allowed subject to the approval of RO In-charge.
- Promoters must contribute a minimum of 20% of the project cost. For loans up to Rs. 3 crore on machinery/equipment where 100% financing is proposed, cash collateral of up to 25% of project cost on the lines of the SPEED scheme will be applicable.
Interest Rate and Repayment:
- The interest rate will be 5.50% to 6.80% p.a. for the first year. From subsequent years, it will be based on internal rating.
- Repayment up to 7 years, including a moratorium of up to 2 years.
Conclusion:
This scheme aims to promote existing MSMEs engaged in high growth and priority sectors for undertaking expansion/modernization projects. The main benefits of the scheme include attractive ROI, 80% financing of project cost, maximum subsidy benefits, the lowest security requirement, and quick sanction. MSMEs seeking machinery finance for their expansion projects can avail 100% financing up to Rs. 3 crore with an attractive interest rate.
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