MSE GIFT Scheme

If you’re a new MSME business owner looking to go green, the MSE GIFT Scheme is designed for you. This scheme provides financial incentives and support to help you adopt clean technologies, renewable energy, energy-efficient machinery, and sustainable business practices. By reducing the cost of financing and sharing risks with banks, the scheme encourages you to make your operations more environmentally friendly, competitive, and future-ready.

Let’s understand how this scheme will help you.

What is the MSE GIFT Scheme?

The MSE Green Investment and Financing for Transformation (MSE GIFT) Scheme was launched by the Ministry of Micro, Small & Medium Enterprises (MoMSME) on December 20, 2023, as a sub-scheme under the Raising and Accelerating MSE Performance (RAMP) program. The scheme aims to promote sustainable practices among Micro and Small Enterprises (MSEs) across India by facilitating access to affordable finance at concessional rates for adopting green technologies and renewable energy sources.

With the Small Industries Development Bank of India (SIDBI) as the implementing agency, the MSE GIFT scheme is designed to help MSEs reduce their carbon footprint and align with India’s climate goals. This initiative also supports India’s commitment to reduce emissions intensity by 45% by 2030 and achieve net-zero emissions by 2070. Additionally, the scheme benefits from World Bank support, making it a significant step towards fostering green growth in the MSE sector.

Objectives of the MSE GIFT Scheme

• Gain access to institutional finance at concessional rates for your green investments.
• Minimize the extra costs involved in adopting clean and green technologies for your business.
• Get support for projects in renewable energy, energy efficiency, waste management, clean transportation, water management, and circular economy practices.
• Enhance resource efficiency and reduce the environmental impact of your operations.
• Improve your competitiveness and help your enterprise align with global sustainability standards.

Key Features of the MSE GIFT Scheme

• Get 2% per annum interest subvention on term loans up to ₹2 crore for a maximum of 5 years.
• Benefit from a risk-sharing facility that provides a partial credit guarantee on loans up to ₹2 crore.
• Avail loans ranging from ₹10 lakh to ₹2 crore for eligible green projects.
• Enjoy a maximum repayment period of 5 years, including any moratorium.
• Invest in projects listed under the approved 890+ green technologies.
• Access the scheme through SIDBI and participating banks/NBFCs.
• The GIFT Scheme will be operational from 2023-2024 to 2025-2026.

Financial Assistance Offered Under the MSE GIFT Scheme

Note:

• You can get a term loan or working capital loan for eligible green projects.
• The interest subvention is released through SIDBI.
• The risk-sharing facility helps reduce the risk for banks, making it easier for you to get financed.

Eligibility Criteria for the MSE GIFT Scheme

Eligibility

You are eligible if:

• You are a Micro or Small Enterprise (MSE) with a valid UDYAM registration.
• Your business is in the manufacturing or service sector.
• The loan size you seek is up to ₹2 crore.
• Your project involves eligible green technology (from the approved list).
• The assistance is sanctioned after the official launch of the scheme.

Non-Eligibility

You are not eligible if:

• Your business or its promoters/directors/partners are on any defaulter list.
• Your business has defaulted with any bank, NBFC, or financial institution.
• You have already availed guarantee cover under CGTMSE for the same loan.

Documents Required for MSE GIFT Scheme

• UDYAM registration certificate.
• Business identity and address proof.
• Promoters’/Directors’ KYC documents.
• Sanction letter from the lending bank/financial institution.
• Declaration & Undertaking (between you and the lender).
• Tax invoice for the eligible plant & machinery.
• Snapshot of geotagging (photo of project site).
• Any other documents as required as per guidelines.

How to Apply for the MSE GIFT Scheme?

Step 1: Identify an eligible green project (e.g., solar panels, energy-efficient machinery).

Step 2: Approach a participating bank or NBFC that has signed an MoU with SIDBI for the scheme.

Step 3: Prepare and submit your project proposal along with the required documents to the lender.

Step 4: The lender evaluates your proposal and, if approved, sanctions the loan.

Step 5: The lender submits your case for interest subvention and/or risk-sharing facility to SIDBI.

Step 6: Once approved, you receive the loan and can implement your green project.

Step 7: Ensure compliance with scheme guidelines and provide periodic updates as required.

Benefits of the MSE GIFT Scheme

Lower Cost of Finance
Interest subvention reduces your borrowing cost, making green investments more affordable and helping you save money in the long run.

Reduced Lending Risk
With the risk-sharing facility, banks are more confident in lending to you, even for new or innovative green projects, improving your chances of getting funded.

Enhanced Competitiveness
Adopting green technologies can make your business more efficient, environmentally friendly, and attractive to customers and global partners.

Supports Sustainable Growth
The scheme encourages you to reduce your environmental footprint, helping your business align with global sustainability goals and regulations.

Wider Access to Finance
Multiple banks and NBFCs participate, so you have more choices and better chances to secure funding for your green initiatives.

Real-World Examples of the MSE GIFT Scheme

• Solar panel installation for manufacturing units
• Upgrading to energy-efficient machinery
• Setting up waste recycling plants
• Electric vehicle fleet adoption for logistics companies

Related Government Support Plans with the MSE GIFT Scheme

Final Words

Imagine transforming your MSME into a green, future-ready business while enjoying lower borrowing costs and easier access to finance. The MSE GIFT Scheme is your gateway to adopting sustainable technologies, boosting your competitiveness, and making a positive impact on the environment. 

Take the first step today, explore green opportunities, prepare your proposal, and let your business be part of India’s green revolution!