SIDBI STEP Scheme: Term Loan to Enhance Production of MSMEs

The Small Industries Development Bank of India (SIDBI) has launched a fast-track financing initiative called the STEP Scheme (Term Loan to Enhance Production of MSMEs). This scheme aims to facilitate quick access to credit for Micro, Small, and Medium Enterprises (MSMEs), helping them meet incremental working capital needs or fulfill urgent confirmed orders.

With streamlined processing and simplified documentation, the STEP scheme is a strategic effort to support and empower the MSME sector — the backbone of India’s economic growth.

Objective of the STEP Scheme

The primary goals of the SIDBI STEP Scheme are:

• To provide short- and medium-term financial support to existing MSMEs

• To augment Net Working Capital (NWC) needs quickly

• To fund the execution of urgent and confirmed orders

• To support MSMEs where regular working capital limits cannot be enhanced by existing lenders

Key Features of the STEP Scheme

• Fast Approval: Loan sanctioned within 48 hours

• 100% Finance: Available for both new and existing MSME units

• No Processing Fee: Borrowers are exempted from processing charges

• CGTMSE Cover: Option to avail credit guarantee under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

• Simplified Documentation: One-page application with built-in checklist

• Flexible Usage: Funds can be used to boost working capital or execute confirmed orders

Eligible Enterprises

The scheme is open to:

• Micro, Small, and Medium Enterprises as per the MSMED Act, 2006

• Units with a minimum of 3 years of operations (or 2 years for existing SIDBI customers)

Eligibility Criteria

To qualify for the STEP Scheme:

• The enterprise must be a registered MSME

• Should have at least 3 years of operations, or 2 years for SIDBI’s existing clients

• Must not be availing WCL or OD facilities from other financial institutions

• Should have shown operating profit in the last 2 years (1 year for existing SIDBI customers)

• Must have a clean repayment track record with no defaults

• CIBIL, CMR, and other standard due diligence norms apply

Loan Amount (Quantum of Assistance)

• Up to ₹300 lakh for existing SIDBI customers

• Up to ₹200 lakh for new customers

Interest Rate

• Interest is linked to SIDBI’s Marginal Cost of Funds Based Lending Rate (MCLR)

• Final ROI is determined based on the internal credit rating of the borrower

Repayment Tenure

• Loan repayment period of up to 3 years, including a moratorium of up to 6 months

Application Process for the STEP Scheme

Follow these steps to apply:

1. Visit the SIDBI online portal

2. Click on the Registration tab to create a new user profile

3. Fill in enterprise details: Name, Phone Number, Email, and Loan Requirement

4. Post-registration, log in with provided credentials

5. Fill in the one-page application form and upload documents as per checklist

6. Submit KYC documents and undergo standard due diligence

7. Upon successful verification, loan amount is disbursed within 2 working days

Required Documents

• Completed application form

• Enterprise details (Udyam registration, GST certificate, etc.)

• PAN card, identity & address proof

• Last 2–3 years’ audited financials

• Standard KYC documents

• Bank account details

Conclusion

SIDBI’s STEP Scheme is a game-changer for MSMEs looking for quick, collateral-free, and purpose-driven funding. Whether it’s working capital augmentation or execution of urgent orders, this scheme bridges the credit gap efficiently and supports business continuity. With minimal paperwork, zero processing fees, and rapid disbursement, it’s one of the most MSME-friendly schemes available today.