Posted by:Amani Nagda
UCO Bank operates with various schemes to help entrepreneurs in setting up business with various types of credit and financial services to offer to them.
Under the UCO Udyog Bandhu Scheme, term loan, cash loan, composite loan or bank guarantee limit, it is provided to eligible entrepreneurs. Technically qualified, talented/ well trained/ experienced persons/ persons with entrepreneurial capabilities are the preferred target of this group scheme. This scheme is for those entrepreneurs who have a priceless business idea but no finance to turn it into reality. Hence this scheme gives those deserving entrepreneurs a chance to make their come true.
Particulars of the Scheme –
- The Activities that are eligible for finance – Credit limit is given to the enterprises that are to do with manufacture, production, processing or preservation of good and services that are related to economic activities.
- Types of facilities offered – Term loan/ Composite loan/ Cash Credit/ bank Guarantee Limit. These are the facilities offered on the basis of the need.
- Eligibility criteria of the borrower – Those entrepreneurs who are technically qualified, promising and well trained, those who are experienced, people having entrepreneurial ability, those who run a manufacturing and service enterprise under Micro & Small Enterprise as per the definition – MSMED Act 2006 (Udyog Adhar)
- The Quantum of Finance – If it is Fund Based, a minimum of Rs.1 Lakh and a maximum of Rs.5 Crore is offered. If it is Non-Fund Based then, there is a 50% of the fund-based working capital with a maximum of up to Rs. 2.50 Crore. The total od Fund Based and Non – Fund Based exposure should never exceed an amount of Rs. 7.50 Crores.
- There is a Margin of 20%
- Interest rates – If the amount of the loan ranges between Rs. 10 Lakhs to Rs. 100 Lakhs, the Base Rate is then +1%. If the amount of the loan is above Rs. 1 Crore, then the Base Rate is as per internal rating that is applicable for MSME loan accounts. For all the women entrepreneurs, the applicable rate of interest rate will be 0.50% less than the actual effective rate of interest. However the applicable and effective rate of interest after allowing the mentioned concession of 0.50% should not fall below the Base Rate.
- Security Measures – As for the primary security measures, hypothecation of stocks, book debts and fixed assets are created out of the bank’s loan for existing and new units. As for collateral security measures for up to Rs. 10 Lakh, no collateral or third party
- Period of the loan and terms of repayment – The maximum repayment period should not exceed more than over 108 months which excludes the moratorium period which is again a maximum of 18 months. Nothing more, nothing less.