India’s startup scene recently outranked South Korea, becoming the third-largest startup economy in the world. Maharashtra, often referred to as the financial capital of India, substantially contributes to this achievement. 

Startups in India have created more than 12 lakh jobs, which speaks volumes of its contribution to economic growth. In tandem with this fact, the government has created an enabling environment by providing business loans for startups In Maharashtra.

The Ministry of Skill Development and the Maharashtra State Innovation Society are strategically channeling entrepreneurial focus towards high-growth sectors like biotechnology, IoT, AI, clean energy, and fintech. Startups in these sectors prefer debt marketplaces like Recur Club, which helps them raise capital tailored to their business needs. 

Maharashtra's Startup Ecosystem

Maharashtra boasts a vibrant entrepreneurial base with financial institutions like SEBI, NSE, and RBI and a robust infrastructure, particularly in Mumbai. Accelerating this notion, the government has shifted its focus towards biotechnology, artificial intelligence, fintech, and IoT sectors. This shift implies that startups are not restricted to urban areas and can bloom in rural and semi-urban regions.  

Mumbai is a ruling hub for startups in Maharashtra. From being a financial superpower to being in proximity to other cities, the city of dreams is every entrepreneur’s top choice to begin their startup journey. Before you explore the schemes and policies for startups, check out these latest startup trends in 2024 to stay ahead of the curve.

Specific Policies and Schemes for Startups

The government of India encourages the youth to support their startup ideas and implement them through various policies and schemes. Let’s check a few of these schemes below: 

1. Prime Minister’s Employment Generation Programme (PMEGP)

The Khadi and Village Industries Commission (KVIC) implements this scheme, which has goals such as employment generation at its core. The KVIC also promotes self-employment by providing financial assistance to commence businesses. 

2. Seed Money Scheme (SMS)

When the government of Maharashtra observed a gap in various MSMEs' access to formal credit, they introduced the Seed Money Scheme. This scheme provides the much-needed financial capital that small and medium enterprises need to establish their brand. Interestingly, this scheme is a Prime Minister Employment Generation Programme subpart. It covers any business or service comprising projects at most Rs. 25 lakhs. 

3. District Industries Centre Loan Scheme 

The district industries center loan scheme promotes inclusivity and supports startups in rural and semi-urban areas. This scheme focuses on providing loans to entrepreneurs with an investment in plant and machinery up to Rs. 2 lakhs. Also, state governments reward entrepreneurs with special recognition to express appreciation for their efforts and the very spirit of entrepreneurship. 

 4. Stand Up India Scheme

This scheme speaks to women's power! It runs behind the objective of supporting Scheduled Caste (SC), Scheduled Tribe (ST), or women entrepreneurs for greenfield enterprises specifically. The Stand Up India scheme aims to provide loans ranging from Rs. 10 Lakhs to Rs. 1 crore for setting up any manufacturing or agricultural enterprise. 

Recur Swift is working along the same lines as these schemes, a product of the leading fintech platform Recur Club that provides ultra-fast funding with no hidden charges or collaterals. Check out how Wellversed, a health and wellness brand, achieved 2x revenue growth in one year through Recur Club. 

The startup ecosystem in India is at a new high! If you are an entrepreneur reading this article, check out the above schemes in detail. 

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Prime Minister’s Employment Generation Programme (PMEGP)

Overview and Goals of PMEGP

Starting with the Prime Minister’s Employment Generation Programme, this credit-linked subsidy focuses on creating employment opportunities. The Khadi and Village Industries Boards operate nationally, while State KVIC directorates and DICs are at the state level. Since its inception in 2008, PMEGP has successfully created over 1.5 million jobs.

Eligibility Criteria and Target Sectors

PMEGP supports establishing enterprises in the manufacturing and business sectors. The maximum project cost an entrepreneur can avail through this scheme is Rs. 10 lakhs for the business/ service sector and Rs. 25 lakhs for the manufacturing sector. It is important to note that only new projects are considered for loan sanction under this scheme with an applicable age limit of 18 years. 

Beneficiaries: SHGs, Registered Institutions, Charitable Trusts, BPL Members

This scheme targets a diverse range of beneficiaries, including Self-Help Groups (SHGs), registered institutions, charitable trusts, members of Scheduled Castes/ Scheduled Tribes, minorities, and women. It focuses on inclusivity at its core and works to uplift all sections of society. Check out how this scheme helps its beneficiaries below: 

• Individuals: Supports aspiring entrepreneurs with financial capital.
• Self-Help Groups: Encourages startups among marginalized communities and SHGs.
• Registered Institutions: Training institutions that encourage entrepreneurship can also benefit from this scheme. 
• Charitable Trusts: Charitable trusts that support economic development can leverage this scheme. 
• Members of Scheduled Castes/ Scheduled Tribes: PMEGP explicitly targets members of SC/ ST communities who require funds for self-employment. 
• Minorities and Women: PMEGP empowers women and minority communities with resources to commence their entrepreneurial journey. 

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Seed Money Scheme (SMS)

Purpose of SMS as a Part of PMEGP

SMS's sole purpose as a subcomponent of PMEGP is to harness the youth’s potential by providing the necessary financial support to commence their businesses. This initiative aims to increase the rate of employment, stimulate entrepreneurship, and promote self-employment, with a keen focus on reducing the growing unemployment rate. 

Provision of Soft Loans to Unemployed Youth

Many young entrepreneurs leave their brilliant startup ideas behind because they need more funds. This scheme settles this ordeal. It provides soft loans to unemployed youth at lower interest rates than traditional loans. To secure 1 lakh unemployed youth financially, this scheme is easily accessible for budding entrepreneurs. 

Focus on Both Rural and Urban Areas

India is home to 1.4 billion minds and 808 million youth. This SMS scheme caters to both the rural and urban sectors. What it ultimately needs is access to financial support without any burden! While this scheme stimulates local economies in rural areas, it is a massive catalyst in promoting the startup culture in urban areas.

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District Industries Centre Loan Scheme

Objective of the Scheme 

The main objective of DICs is to promote small businesses with low investment in plant and machinery in rural and semi-urban areas. DICs perform and execute several tasks, such as preparing feasibility reports, procuring equipment, providing credit facilities, and resolving entrepreneurial problems. They also promote the registration and development of SHGs and other industrial cooperatives. 

Eligibility Criteria

The DIC eligibility criteria require an entrepreneur to invest Rs. 2 lakhs or less in plant and machinery. This criterion centers focus only on small and micro enterprises to ensure the overall economic development of urban and rural areas. In addition to this, there are some other critical criteria. 

An applicant should:

• Be an Indian citizen and should have attained the age of 18 years.
• Possess the required educational qualifications and experience for the proposed project.
• Not be a defaulter of any bank or financial institution.
• Be devoid of any other subsidy or scheme for the same project.
• Contain a viable project report.
• Be able to contribute the required margin money and collateral security (if applicable) for the project.

Loan details and benefits

If you fulfill the above eligibility criteria, the following benefits of the DIC scheme may interest you.

• Interest Rate: The subsidized interest rate varies between 4% and 10%, depending on the scheme and the borrower’s profile.  
• Loan Amount: The loan amount varies depending on a project’s size and cost. However, an entrepreneur can finance most of the project’s cost as a loan, ensuring a smooth start to the business.
• Repayment Tenure: The maximum repayment duration for loans is ten years, which is sufficient time to repay the loan. 
• Collateral-free Loans: A significant benefit of DIC is that it demands no collateral or margin money for loans up to Rs. 10 lakhs. This makes it an attractive scheme for those with financial constraints and limited resources. 

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Stand Up India Scheme

Focus on Women and Minority Business Owners

The Standup India Scheme is a flagship initiative by the Government of India to promote inclusivity towards underrepresented communities like Scheduled Castes (SC) and Scheduled Tribes (ST). It also targets women who wish to start their businesses and assists them with capital. This scheme aims to break socio-economic disparities in India by creating a balanced and equal society. 

Loan range: 10 lakh to 1 crore

If you are an SC/ ST community member or a woman, you can avail of loans from 10 lakh to 1 crore. Factors such as the entrepreneur’s contribution and project cost decide the loan amount. This wide loan range effectively covers both small—and large-scale projects.

Business ownership criteria: Majority-owned by SC/ST or women

You must belong to the SC/ ST community or be a woman to benefit from this scheme. Except for these target groups, no one can avail of this scheme, which makes it a spearheader of empowering women and SC/ STs, as its name rightfully suggests, “Stand Up India”! 

This scheme covers loans under the Credit Guarantee Fund Scheme for Stand Up India. Its good reputation provides a credit guarantee to banks, gaining their confidence in issuing loans. Entrepreneurs can also gather direct support from Nodal Agencies and Partner Institutions for mentorship and training. 

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Support for Micro, Small, and Medium Enterprises (MSMEs)

Importance under Maharashtra Industrial Policy 2013

MSMEs contribute more than 29% of India’s GDP. They are also responsible for 50% of the country’s exports. The Maharashtra Industrial Policy 2013 lists measures to support and promote MSMEs, especially in underdeveloped areas. The following points outline its importance. 

• It prioritizes promoting MSMEs in less developed areas through financial incentives. It also encourages MSMEs to adopt innovative measures and practices to compete in the market. 

• MSMEs in Maharashtra get tax redemptions for operating in less developed regions. These tax benefits reduce their financial burden and encourage continued growth. 

• Besides the incentives listed above, the policy includes a package scheme of incentives (PSI) designed to promote the growth of MSMEs in Maharashtra. These schemes come with innumerable benefits, including incentives for women-led organizations, skill development programs, subsidies for capital investment, and even grants for technology acquisitions. 

The Maharashtra Industrial Policy 2013 has built a thriving ecosystem for MSMEs with its various support mechanisms. This plays a crucial role in contributing to the state's prosperity. 

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Women Entrepreneurship Initiatives

Women entrepreneurship is at the forefront of Maharashtra’s economic growth policies. The state has two key components to support this initiative: the Women Entrepreneurship Cell (WEC) and the Women Entrepreneurship Platform (WEP). These organizations push the envelope further by providing training and essential resources to aspiring women entrepreneurs. Let’s dig into these initiatives in detail.

Women Entrepreneurship Cell (WEC)

The WEC operates with the primary objective of educating women about entrepreneurship and business management. The cell aims to empower women with financial literacy, legal knowledge, and marketing skills to run successful businesses. 

It includes awareness programs and networking opportunities with industry experts and potential investors. WEC, in collaboration with various stakeholders, including NGOs, creates a conducive environment for women to flourish and grow. Women can also access the resource hub and avail of support services. 

Women Entrepreneurship Platform (WEP)

Built on three core pillars, the Women Entrepreneurship Platform is an amalgamation of resilience, knowledge, and action. It encourages women to transform their business aspirations into reality through a robust entrepreneurial ecosystem that nurtures women entrepreneurs' vision. After conceptualizing it in 2017, it was launched in 2018 at the Global Entrepreneurship Summit in Hyderabad, India. It consists of several programs to put women at the forefront of financial independence. The platform provides services including: 

• Upgrading Entrepreneurial Skill Set
• Mentorship and Marketing Assistance
• Tax Assistance
• Funding for Startup Ventures
• Network Building Programs

Financing Women Collaborative, a sub-initiative of the WEP, was hosted on July 5, 2024, in Mumbai to acknowledge efforts to accelerate finance for women entrepreneurs. It focused on an agenda to perceive and practice financial inclusion and unlock women's potential for achieving Vision 2047. 

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Financing New Age Startups With Recur Club 

Recur Club is India’s most seamless and fastest debt capital-raising platform. Leading its way into the debt market, Recur Club distinguishes itself by leveraging technology to make capital available with flexible repayments and collateral-free loans. 

It boasts a network of 125+ marquee lenders willing to invest in change-making entrepreneurs. In alignment with Maharashtra’s support for startups, Mumbai captures the third largest share of Recur Club’s portfolio, closely followed by other startup giants like Bengaluru and Delhi. This suggests that Mumbai is a thriving startup ecosystem with a strong entrepreneurial community.

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Conclusion

Startups in Maharashtra have proliferated in the last decade. With multiple government schemes and subsidies, the entrepreneurial spirit is promoted throughout the country, inviting participation from all sectors of the economy. Not only this! 

As the country's pivotal startup hub, Mumbai has inspired many industry leaders in tier-2 or tier-3 cities to leverage debt capital and achieve their startup dreams. 

So, if you're a seasoned entrepreneur looking to scale your venture, Recur Club’s capital assistants can help you raise the desired capital for your startup or SME. 

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