Small Scale Lending Scheme — ₹1.25L Microcredit at 5% (Gujarat)

The Small Scale Lending Scheme (Microfinance) is a microcredit programme floated by the Social Justice and Empowerment Department, Government of Gujarat. It exists to put affordable business finance within reach of small entrepreneurs belonging to the Rabari and Bharwad communities, both of which are counted among the socially and educationally backward classes and have historically struggled to raise money from mainstream banks.

The scheme is rolled out on the ground by Gujarat Gopalak Vikas Nigam, the state undertaking tasked with reaching beneficiaries and disbursing the credit across Gujarat.

This is a debt product, not an equity deal. An approved entrepreneur takes a loan and repays it at a concessional rate, so no share of the business is signed away. Applications are accepted on a rolling basis, which means there is no cut-off date to beat before applying.

• Loan of up to ₹1,25,000 for a micro-enterprise
• Interest capped at 5% per annum
• Loan funds 95% of project cost; the entrepreneur brings 5%
• Open to Rabari and Bharwad applicants in Gujarat
• Applicants aged 21 to 45, with annual income up to ₹3,00,000
• Rolling applications — no fixed deadline

Eligibility rests on three specific conditions that applicants must meet together.

• Community: the applicant must belong to the Rabari or Bharwad castes, which fall under the socially and educationally backward classes.
• Age: the applicant must be between 21 and 45 years old.
• Income: annual income must be ₹3,00,000 or less.

The scheme is aimed at small entrepreneurs who want to set up or grow a micro-enterprise. No particular trade or industry is excluded, which makes it usable across a wide range of small businesses.

Small Scale Lending Scheme — ₹1.25L Microcredit at 5% (Gujarat) is open to startups at any stage. It is open to startups registered anywhere in India.

Small Scale Lending Scheme — ₹1.25L Microcredit at 5% (Gujarat) accepts applications on a rolling basis — there is no fixed cut-off date, so eligible startups can apply at any time. Because rolling programmes can pause without notice, confirm the window is still open on the official site before you start.

Approved beneficiaries receive a microcredit loan of up to ₹1,25,000, handed out as cash, to start or expand a small enterprise.

• Interest is capped at 5% per annum, well below what a conventional lender would charge, so repayments stay light and profits can go back into the business.
• The loan can fund 95% of the project's total cost. The entrepreneur contributes only the remaining 5%, which sharply reduces the upfront capital needed to get going.

The structure is built around accessibility: a small own contribution, a concessional rate and a loan sized for micro-enterprises that would otherwise be turned away by banks. The result is self-employment and a steadier livelihood for the entrepreneur and their household.

Small Scale Lending Scheme — ₹1.25L Microcredit at 5% (Gujarat) is offered by Social Justice and Empowerment Department, Government of Gujarat, a government body. As a government-backed debt / loan, it is publicly funded and open to eligible startups across India.

Selection begins with an online application filed through the DAAD Online portal, where the form and supporting documents are uploaded together.

Once submitted, the papers are examined by Gujarat Gopalak Vikas Nigam, the implementing agency, along with the Social Justice and Empowerment Department. The review checks that every eligibility condition is satisfied — caste verification, the 21 to 45 age band and the income ceiling — and that the uploaded documents are genuine and complete, with the paperwork cross-referenced for consistency.

The scheme does not mention separate committee evaluations, interviews or pitch rounds. In practice, the process is administrative scrutiny followed by sanction and disbursal, so that credit reaches eligible and deserving applicants.

Before you apply to Small Scale Lending Scheme — ₹1.25L Microcredit at 5% (Gujarat), keep the following documents ready:

• A pitch deck or short business plan describing the problem, product and traction
• Company registration documents and PAN
• Founder identification (PAN / Aadhaar) and brief profiles
• Recent financial statements or projections
• Product details — a demo, prototype or working link if available

Exact requirements are confirmed on the official application portal — treat this as a preparation checklist.

Small Scale Lending Scheme — ₹1.25L Microcredit at 5% (Gujarat) is best suited for startups in India seeking non-dilutive funding of ₹1.3L. If that describes your startup, review the eligibility criteria above before applying.