The Nasscom report for the year 2018 titled “Indian Start-up Ecosystem 2018- Approaching Escape Velocity,” stated that India has the third-largest number of start-ups in the world. Undoubtedly, the start-up ecosystem is growing and thriving in the country with more than 65000 start-ups registered under the Start-up India Scheme with already 100 start-ups reaching unicorn valuations and many more coming. It is important to understand that without the appropriate funding and resources required to start a business and run it in the early stages, it is just a mere idea. They need funds to maintain a strong fiscal stimulus with concessional working capital loans to ensure there is adequate liquidity available to run day-to-day business operations and fund business expansion requirements.
However, Small scale businesses and entrepreneurs in Imphal, Manipur find it hard to obtain funds from banks/financial institutions, which makes them turn to angel investors and venture capitalists, which is even harder, and even if it does, it costs them equity and ownership at the beginning itself. Realizing the importance of the start-ups and small-scale units in the economic development and employment generation in the country, the Government of India has rolled –out various policies and programs to facilitate credit facilities to start-ups and existing businesses in a rather simpler and more efficient manner.
These loan schemes in Imphal, Manipur have been introduced with the primary objective to offer financing through business loans with flexibility in collateral and lesser documentation requirements. Any start-up or entrepreneur can borrow funds in the form of a business loan through any of these schemes offered by the government which suits their business needs. Further, the Small Industries Development Bank of India (SIDBI) has started to offer funds directly to start-ups and MSME businesses rather than channelizing funds through banks or financial institutions at concessional interest rates which are way lower than those offered by banks by almost 300 basis points.
In case you are going to start your business in Imphal, Manipur anytime soon or already looking for options to fund your business, you need to take note of these business loans for your start-up as provided below.
Meaning & Definition of Start-ups in Imphal, Manipur
Under the Start-up India Scheme launched in the year 2016, a start-up in Imphal, Manipur means an entity that is-
- An entity incorporated either as a Private Limited Company /a Partnership Firm/Limited Liability Partnership under their respective Acts under the Indian Law up to ten years from the date of incorporation/ registration.
- The annual turnover of such an entity has not exceeded one hundred crore rupees in any of the financial years since incorporation/ registration.
- The entity should be working towards innovation, development, or improvement of products or processes or services, or in case of a scalable business model with a higher potential to generate employment or creation of wealth or both.
- However, such entity shall not be formed or constituted either through splitting up or reconstruction, of a business already in existence.
An entity shall cease to be a Start-up post the completion of a period of ten years from the date of its incorporation/ registration or the turnover of the entity exceeds one hundred crore rupees.
Manipur is one of the states among the seven sisters of northeast India. Nagaland, Mizoram, and Assam border it and share international borders with Myanmar. During British rule, Manipur used to be a princely state. The state joined India on 11th August 1947 after the signature of the instrument of accession by Maharaja Budhachandra. The state’s official language is Manipuri, and the state consists of a 41% tribal population. There are different ethnic groups in Manipur that practice a variety of religions. As per the 2011 census, Hinduism is the major religion of Manipur, followed by Islam, Christianity, Buddhism, Judaism, and Sanamahism.
The state’s economy is primarily dependent on agriculture and has significant hydroelectric power generation potential. Imphal airport is an international airport that connects the state to the whole world. The natural climate and soil of Manipur are ideal for horticulture crops. Many rare and exotic medicinal and aromatic plants are found in Manipur. Major cash crops grown in the state are cashew, lichi, walnuts, lemon, papaya, pineapple, orange, peach, plum, and pear. The majority of cultivators in Manipur are women. The people of Manipur still follow the traditional cultivation method, so agricultural modernization is yet to be founded in Manipur. The best tourist season to visit Manipur is October to February. The state has rich culture and values. It is said that Polo, the royal game originated in Manipur.
Capital- Imphal
The startup ecosystem of Manipur
Manipur is slow but steadily began to take the initiative towards creating a robust startup ecosystem. The Manipur government outlined its startup policy in 2016. The startup policy of Manipur is known as the ‘Manipur startup policy.’ The vision of the startup policy is to make Manipur a top startup destination in the north-eastern region by taking different initiatives.
Under the startup policy, the Manipur government has established a startup cell in the state planning department. The motto behind establishing the startup cell is the implementation of the startup policy of the state. Through the startup policy, the Manipur government targets to build a strong startup ecosystem by assisting startups at various stages like pre-idea, idea, or prototype.
Through the startup policy, the state wants to create a Network of Entrepreneurship Development Centres (NEDC) with universities and institutions of higher education. The state will create a mentor expert network for startups. The valid startup policy of Manipur is yet to be notified, and the policy’s implementation date and guidelines will be drafted post-launch.
Top business ideas in Manipur
Manipur is known as ‘India’s gateway to the East.’ The state has an agricultural economy. Besides agriculture, it is dependent on industries, tourism, and mining for its economic development. The different crops grown in Manipur includes pulses, wheat, maize, rice, etc. If you aspire to set up a small business in Manipur following are the best options: –
Craft making
Manipur has a rich culture, and the craft of Manipur is famous worldwide. Women of Manipur make different decorative items and crafts. These are not random and ordinary crafts, but they reflect the culture and tradition of Manipur. The traditional decoration supplies and handicrafts of Manipur will always be in high demand, so setting up a craft-making business in Manipur can make you huge profits with less investment.
Handloom business
The Handloom industry of Manipur is famous for its colorful and cultural textures. For the local people, the handloom industry is a major source of livelihood. The women of Manipur are majorly engaged in the handloom industry; they have inherited this skill from their ancestors. Above all, the Manipur Handloom and Handicraft Department Corporation and the state government are also trying to market local artisans’ handloom products. So, a handloom industry in Manipur is also a good startup option. To establish the handloom industry in Manipur, you must contact local artisans, especially women.
Food processing business
Manipur is agricultural land, so the food processing industry is an ideal option in Manipur. Even the Government of Manipur is also trying to promote and develop the food industry by implementing different schemes under the central sector schemes. Besides, the state government is planning an initiative to open a food park at Nilakuthi. With the state government’s schemes, the food processing business will surely make good profits. This is a low-investment business but will help you make long-term profits.
Bamboo industry
Manipur has a lot of bamboo as it is rich in bamboo production. Majorly women are involved in the production of bamboo. By setting up, the bamboo industry you will create employment opportunities for local artisans. Besides this, bamboo is a crucial part of traditional cuisine in the North-Eastern states. So, it is surely a good small-scale business idea, especially for ladies living in rural areas as they know bamboo production and related activities.
What are the government loan schemes for start-ups & existing businesses in Imphal, Manipur?
Provided below are some of the most popular and notable government schemes which facilitate finance for start-ups and new businesses in Imphal, Manipur-
i. NABARD schemes for MSMEs and start-ups in Imphal, Manipur–
National Bank for Agriculture and Rural Development NABARD is a rural developmental bank that primarily emphasizes the development of the rural sector in India through the strengthening of small-scale businesses and industries cottage industries, and other rural projects by offering concessional loans to them under various policies and programs.
These policies & programs have been aimed at augmenting capital investment, sustained income flow, and employment areas of national importance. Additionally, it has been a channel partner of the Govt. under several schemes projects with objectives such as social innovations and innovative projects related to soil & water conservation.
Some of these schemes in Imphal, Manipur include-
- Agricultural Marketing Infrastructure Scheme;
- Agri Clinics and Agri-Business Centres Scheme;
- National Livestock Mission for development of Entrepreneurship and generation of Employment.
- Dairy Entrepreneurship Development Scheme;
- National Project on Organic Farming Scheme.
ii. Pradhan Mantri Mudra Yojana (PMMY) in Imphal, Manipur–
Pradhan Mantri Mudra Yojana is a scheme launched in the year 2015 by the Prime Minister of India under the Micro Units Development and Refinance Agency (MUDRA), an institution set up by the government with the purpose to finance business activities of the MSMEs and start-ups operating in the non-farming and non-corporate sector.
Mudra Scheme essentially offers business loans in the nature of working capital cum term loans to start-ups and existing small scale businesses up to a sum of Rs.10 Lakhs engaged in all kinds of business activities in the manufacturing, trading, and service sector.
Under the aegis of Pradhan Mantri Mudra Yojana, the MUDRA scheme offers three loan products, each of whom indicates the stage of growth and funds requirement and also affords a reference point for the next phase of graduation/growth of the respective start-up, namely as-
- Shishu covers loans up to the maximum value of Rs 50,000,
- Kishore covers loans up to the values between Rs 50,000 and up to Rs 5 Lakhs and
- ‘Tarun’ covers loans up to the values between Rs5 Lakhs and up to Rs 10 Lakhs.
Any start-up or entrepreneur aged between18 to 65 years is eligible to apply for and avail of a Mudra Loan for a newly incorporated or any existing business without having to worry about the collateral or third-party security issues at a subsidized and affordable interest rate. Also, women entrepreneurs could obtain funds at discounted interest rates.The borrower start-up or existing business could apply for a Mudra Loan either through prescribed lending partners or through Small Finance Banks, Regional Rural Banks (RRBs), Micro-Finance Institutions (MFIs), and Non-Banking Financial Companies (NBFCs) either by contacting them directly or applying through the Udyami Mitra portal online.
iii. Credit Guarantee Scheme by CGTMSE in Imphal, Manipur–
The Ministry of MSME and the Small Industries Development Bank of India (SIDBI) jointly launched the Credit Guarantee Scheme (CGS) for MSMEs and start-up businesses intending to build a strong credit delivery system and facilitate a seamless flow of credit for the under-served and underprivileged and ensuring availability of finance from conventional lenders to new generation entrepreneurs.
Further, the credit guarantee scheme also aims to give reassurance of the timely loan repayments through guarantee covers to would make good the loss so incurred by the lender up to 50-85% percent of the credit facility and instead focus on the viability of the business of the start-up business while offering loan services under the scheme.
The funds offered under the Credit Guarantee Scheme are facilitated through public banks, private banks, foreign banks, and regional rural banks, who have played a significant role in offering guarantee covers to collateral and/or third-party guarantee free credit facilities extended by eligible Member Lending Institutions established under the scheme since last two decades.
Any existing or newly incorporated start-up engaged in either manufacturing or service activities could avail of funds under the Credit Guarantee Scheme. However, businesses engaged in retail trade, agricultural institutions, training facilities, or self-help groups have been expressly excluded under the scheme.
iv. Stand–Up India Scheme in Imphal, Manipur–
The Stand-up India Loan Scheme was introduced by the government of India in the year 2016 headed by the Small Industries Development Bank of India (SIDBI) with the primary objective to encourage the spirit of entrepreneurship among women and people from SC/ST backgrounds and increase their participation in the business industry.
This loan scheme ensures the facilitation of start-up loans between Rs. One Lakhs to One crore at least one Scheduled Cast (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per branch of each bank to set up a Greenfield enterprise which means first-time business venture of the beneficiary in either manufacturing or services, or in the trading sector. However, such women entrepreneurs or SC/ST must hold at least 51% of the shareholding and controlling stake in the start-up business.
The loans so offered under the scheme are composite and include both term loans and working capital which could be up to 85% of the cost of the project for a term of seven years with a maximum moratorium period of 18 months.
v. Coir Udyami Yojana in Imphal, Manipur–
Coir Udyami Yojana is another subsidy scheme launched in the year 2014 for the purpose of encouraging ease of doing business in India. The purpose of this scheme is to offer funds to start-ups and MSMEs to set –up their coir units with project cost up to Rs 10 Lakhs including one cycle of working capital which should not be more than 25% of the cost of the project.
Under the Coir Udyami Scheme in Imphal, Manipur, the working capital portion of the loan shall not be considered for subsidy. So, if the rate of subsidy is 40% of the cost of the project, bank credit is 55% of the project cost, and the contribution of the beneficiary will be 5% of the project cost. The interest rate chargeable will be equal to the base rate and the maximum tenure of the loans shall not be more than seven years after the first moratorium. Further, the beneficiary start-up need not provide any collateral, security, or guarantor for the loans availed as the scheme is covered under Credit Guarantee Trust Fund Scheme.
Individuals (aged between 18 to 65 years of age),Non-Governmental Organisations (NGOs) or Self-Help Groups, Societies registered under the Societies Registration Act 1860, Co-operative Societies, and charitable trusts will be eligible to apply for this scheme. However, if the project has already been under subsidy of any other scheme launched either by the Central or any state government, then the cost of the project will not be eligible to avail of the Coir Udyami Yojana.
vi. Market Development Assistance Scheme in Imphal, Manipur–
The Ministry of Commerce, under the Govt. of India, launched the Market Development Assistance Scheme for start-ups and MSMEs to enhance their competitiveness and boost their marketing capabilities, and encourage businesses to access and expand their presence overseas through participation in international fairs, sales-cum-study tours, trade delegations, publicity, etc. The primary objectives of the Market Development Assistance Scheme include-
- Encouragement to Small & Micro businesses to tap and grow in markets overseas.
- Increasing participation of the Indian MSEs and their representatives in International Trade Fairs/ Exhibitions from Indian MSME sectors.
- Enhance exports from start-ups and small-scale business enterprises.
Eligibility Criteria for Government Loan in Imphal, Manipur
All MSME start-ups and other related organizations in Imphal, Manipur to the MSME sector will be eligible to make an application and avail of financial assistance.
Fiscal interventions include-
- The maximum financial support towards the participation of a start-up/MSME in an international exhibition/trade fair shall be maximum up to Rs. 30 lakh per event for other countries & Rs.40 Lakh for countries in Latin America.
- Financial assistance would be offered between 25-95% of the Air-Fare and space rent to entrepreneurs based on the size and type of the MSME start-up enterprise. Whereas financial assistance for co-sponsorship of an event would be restricted to 40% of the net expenditure with an upper ceiling of Rs. 5 Lakh
- The maximum amount of assistance towards costs such as airfare, space rental & shipping/ transportation charges for the General Category (except for enterprises from the North-east States/Women/or SC/ST Category)
Type of MSME | Latin America | Other Countries |
Micro Enterprises | Rs. 2.40 lakh | Rs. 2.00 lakh |
Small Enterprises | Rs. 2.10 lakh | Rs. 1.75 lakh |
Medium Enterprises | Rs. 1.25 lakh | Rs. 1.00 lakh |
vii. Sustainable Finance Scheme in Imphal, Manipur–
To offer finances to start-ups specifically working towards sustainable development projects which contribute to developing energy efficiency and cleaner production yet are not covered under the international or bilateral lines of credit, the Small Industries Development Bank of India (SIDBI) has introduced the Sustainable Finance Scheme for MSMEs and start-ups. All newly incorporated start-ups or existing businesses who either wish to invest in the waste management or have been already working in the field could avail funds for all the new or existing sustainable development projects related to renewable energy, green micro-finance, green buildings, eco-friendly buildings, etc
However, in the case of existing units, they shall be required to provide a track record of satisfactory past performances and sound financial position of the start-ups.
viii. Udyogini Scheme in Imphal, Manipur–
Udyogini Scheme or Udyogini Yojana was launched in the year 2014 by the Women Development Corporation under the Government of India. The primary objective of the scheme is to ensure better participation and welfare of women entrepreneurs in the Indian start-up ecosystem up to a value of Rs.3 Lakhs with a repayment tenure of 6-7 years. This scheme is eligible only for women entrepreneurs with an annual income lesser than 1.5 Lakhs. However, this annual limit of Rs. 1.5 Lakhs shall not apply in the case of widowed or disabled women.
Thus, the loans are offered at concessional interest rates or even without interest at competitive interest rates without charging any processing fee as financial assistance to them. Further, the loans do not need any collateral or guarantor for repayment purposes. Besides, the Udyogini scheme also offers financial support for skill development training programs for women.
ix. Bank Credit Facilitation Scheme in Imphal, Manipur-
The National Small Industries Corporation (NSIC) has entered several Memorandum of Understanding with various private banks/financial institutions and nationalized banks to offer necessary credit support to start-ups and MSME units with the objective to provide a seamless flow of credit, and is therefore known as the Bank Credit Facilitation Scheme.
This scheme helps MSMEs to obtain loans at competitive interest rates from the partner banks the start-up gets a favorable rating awarded by the Performance and Credit rating from the Ministry of MSMEs. The scheme also allows the MSMEs to transfer their existing bank account or create a new one in a different bank. This bank credit scheme supports MSMEs by helping them to file their loan application and submit applications to the banks.
x. Credit Linked Capital Subsidy Scheme in Imphal, Manipur-
Credit Linked Capital Subsidy Scheme is a scheme that focuses on the technological innovation & up-gradation of the MSME start-ups by way of an upfront capital subsidy of 15% to induct well-established and improved technology in the specified 51 sub-sectors and products approved by the Govt. of India. The primary objective of the scheme is to upgrade the plant & machinery either with or without business expansion to set up their facilities with appropriate eligible and proven technologies duly approved under scheme guidelines.
The scheme aims to facilitate technological up-gradation by offering subsidies to a small-scale industrial holding a valid UAM number comprising khadi, village, and coir industrial units on the institutional credit facilities availed by them for modernization of their production equipment and techniques. The beneficiaries under this scheme could avail of funds up to the maximum value of Rs. One crore. All the small-scale business start-ups registered with the Directorate of Industries who wish to upgrade their plant & machinery with new technology are eligible for this scheme.
Factors Affecting Eligibility of a Loan Applicant/Enterprise in Imphal, Manipur
Some of the key factors which affect the eligibility of the borrower start-up business in Imphal, Manipur are-
- Age of the entrepreneur;
- History of Repayment of Loans & financial stability of the applicant;
- Nature and type of business
- Applicant’s credit score or the credit rating of the business
- Preferred Loan amount
- Annual business turnover along with financial statements
- Capital Invested and goods/raw materials/equipment/machinery;
- Debts or existing loans, if any.
Documents Required for Government Loan in Imphal, Manipur
Though, the number of documents required in Imphal, Manipur for each job may vary from the other, provided below are some of the documents generally required by MSMEs or start-up businesses to avail of loan facilities-
- Duly filled application form along with passport-sized photographs
- KYC documents of the entrepreneur or business owner containing documents such as proof of identification, proof of address, and copy of utility bills.
- Previous six months Bank statements
- Copy of Business incorporation/registration Certificate
- Copy of registered address of the business & vintage proofs
- Business PAN card
- Proof of person belonging to SC/ST/OBC category, where applicable
- Any other document as required by the lender.
Conclusion of Government Loans for Startups and businesses in Imphal, Manipur
Therefore, the Government of India has launched various schemes and policies to encourage new-age entrepreneurs including women entrepreneurs and persons from the SC/ST category to ensure an increase in their participation in the making of the nation through the introduction of credit schemes at affordable cost and competitive interest rates.
If you wish to avail any of the above-mentioned schemes and programs in Imphal, Manipur always make sure to prepare a detailed business plan with a summary of potential growth and financial returns expected in near future. Submission of a clear plan with your application will create a strong impression and help you to get the best offers for your start-up venture.