Raw Material Assistance Scheme — NSIC Credit up to ₹20 Cr for MSMEs

The Raw Material Assistance Scheme, run by the National Small Industries Corporation (NSIC) under the Ministry of MSME, is designed to ease the working-capital pressure on Micro, Small and Medium Enterprises. Many MSMEs struggle to buy raw materials upfront, which disrupts production. This scheme lets NSIC pay suppliers directly, so businesses can keep their production lines running without tying up their own cash. It is a practical solution for companies that need steady access to both local and imported materials to stay competitive.

By financing raw material purchases, the scheme helps MSMEs buy in bulk and take advantage of cash discounts, improving their cost efficiency. It also reduces the burden of managing large inventories, allowing entrepreneurs to focus on making quality products. This initiative strengthens the backbone of India's industrial sector by supporting the small businesses that drive economic growth and employment.

• Credit facility for raw material procurement
• Funding up to ₹20 crore (group level)
• Credit period up to 180 days
• Interest rates from 8.75% p.a.
• Benefits of bulk purchases and cash discounts
• Requires valid Udyam Registration

Any Manufacturing or Service MSME can apply, provided it holds a valid Udyam Registration Certificate. Trading activities are explicitly not allowed under this scheme.

Raw Material Assistance Scheme — NSIC Credit up to ₹20 Cr for MSMEs is open to startups at any stage. It is open to startups registered anywhere in India.

Raw Material Assistance Scheme — NSIC Credit up to ₹20 Cr for MSMEs 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.

Successful applicants receive a repayable credit facility to procure both indigenous and imported raw materials. The maximum exposure is ₹20 crore at the group level and ₹10 crore for a single manufacturing unit. The credit period extends up to 180 days, and interest rates start from 8.75% p.a. for Micro units with a valid SME 1 rating (up to 10.25% p.a. for others).

NSIC pays the supplier directly against a Bank Guarantee, which simplifies procurement and frees up the MSME's working capital. The scheme also enables bulk purchasing and cash discounts, improving cost efficiency and competitiveness.

Raw Material Assistance Scheme — NSIC Credit up to ₹20 Cr for MSMEs is offered by National Small Industries Corporation (NSIC), a government body. As a government-backed debt / loan, it is publicly funded and open to eligible startups across India. You can verify current details and timelines on the provider's official website before applying.

NSIC conducts a preliminary appraisal of submitted applications, reviewing the company's financial health, operational stability, and overall business viability based on the documents provided. A unit inspection may be carried out to verify operational aspects and infrastructure. The selection committee evaluates creditworthiness and adherence to eligibility criteria. Sanction of the credit limit depends on a satisfactory appraisal and the unit meeting all stipulated requirements.

Before you apply to Raw Material Assistance Scheme — NSIC Credit up to ₹20 Cr for MSMEs, 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.

Raw Material Assistance Scheme — NSIC Credit up to ₹20 Cr for MSMEs is best suited for startups in India seeking non-dilutive funding of ₹10Cr. If that describes your startup, review the eligibility criteria above before applying.