Cluster Financing
In aggregate, 50 or more enterprises engaged in the production of similar/homogeneous/related goods or services located within a defined geographical boundary of a maximum radius of 5 (five) kilometers shall be collectively considered as a cluster. In this case, the business strengths, weaknesses, opportunities, and threats of the enterprises located under the cluster will be identical. Mentionable that, the definition of cluster is subject to change specially if the National Industrial Policy makes any amendment in this regard.
Eligibility of availing Cluster Loan Facility:
- The initiative must be a CMSME;
- Must be involved in Manufacturing or Service industry;
- It should be clear that the initiative falls under the specific cluster;
- If there is an organization of entrepreneurs under the cluster, the entrepreneur should be a member of the respective organization;
- As per the CIB report the venture should be free of loan/investment defaults;
- Those candidates will be given priority in getting Loan/Investments if they are trained for a minimum period of 01 months from related initiatives from government institutions or reputed private institutions;
- Women entrepreneurs and entrepreneurs with special needs under the cluster will be given priority in getting loan/investment facilities.
Loan Limit:
- Depending on the nature and needs of the enterprise, both working capital and term loan facilities can be provided
- The following Loan/Investment Limits mentioned in Para-2.6 of SMESPD Circular No-02/2019 will be followed to determine the maximum limits:
|
Loan Limit |
Cottage Industry |
Micro Industry |
Small Industry |
Medium Industry |
|||
|
Manufacturing |
Manufacturing |
Service |
Manufacturing |
Service |
Manufacturing |
Service |
|
|
Max Loan Limit |
1,500,000 |
10,000,000 |
2,500,000 |
200,000,000 |
50,000,000 |
750,000,000 |
500,000,000 |
c. A customer can take loan/investment facility from multiple bank/financial institutions as per requirement. However, the aggregate loan/investment limit shall not exceed the specified limit. This should be confirmed by looking at the CIB history
Interest Rate: Regular Loan - 11%, Refinance Scheme - 7%
Tenure: In case of term loan, maximum tenure is 5 years. Grace period (if applicable) will not be more than 6 months. For working capital financing, maximum tenure is 1 year.
Processing Fees: According to the approved schedule of charges
Repayment: Monthly/ Quarterly/ Half-Yearly as per the clients’ requirement