technology fund

Technology & Quality Upgradation Support To MSMEs (TEQUP) – Scheme Details

Technology & Quality Upgradation Support to Micro, Small, Medium Enterprises is a very useful scheme for small business manufacturing entrepreneurs.

Quality and technology up-gradation are the two most important elements for enhancing the competitiveness of the manufacturing industry. Generally, small entrepreneurs face huge difficulty in concentrating on technology and quality up-gradation. Because these two sectors are cash-intensive. And here, this scheme is hugely beneficial for them.

The large industries have both adequate information about the global markets and access to funds. It enables them to implement strategies for continuous technology and quality up-gradation.

On the other hand, MSMEs, with limited information and access to funds, typically think short-term. They tend to minimize capital investment with the objective of keeping the cost low.

Due to this, many Indian MSME suppliers to the lower end of the global value chain. And it ultimately makes them uncompetitive as the suppliers of stand-alone products. This scheme aims to address the quality and technology aspects of manufacturing in MSMEs. Additionally, this scheme encourages and supports energy efficiency by the Micro, Small & Medium Enterprises.

Technology & Quality Upgradation Support To MSMEs – Objective

This scheme focuses the two important aspects, namely, enhancing the competitiveness of the MSME sector through Energy Efficiency and Product Quality Certification. The present scheme also deals with the issue relating to reduction in emission of Green House Gas (GHG) by the MSME sector, through energy efficiency.

The second objective is to improve the product quality of MSMEs and to encourage them towards becoming globally competitive.

Technology & Quality Upgradation Support To MSMEs – Eligibility To Apply

Any MSME unit that has filed an Entrepreneurial Memorandum with the appropriate authority or who has erstwhile DIC registration is eligible for support under the Scheme. The general eligibility conditions are:

a) The MSME should have been audited for energy consumption and have developed a Detail Project Report on EETs.

b) Sole proprietorships, partnerships, Co-operative Societies, Private and Public Limited Companies in the SSI sector are the eligible business entity for this scheme.

c) The DPR should be prepared by a qualified Energy Manager/Auditor.

d) Enterprises in the clusters identified by PCRA/BEE or any other expert agency will be given preference for support under this Activity.

e) The project should primarily focus on energy efficiency for the applicant MSME units. Additionally, it must lead to at least a 15% reduction in energy consumption by the enterprise.

f) Investments in new plants, machinery, and equipment focused on enhancing energy efficiency are only eligible for subsidy under the scheme.

g) After completion of the EET project, the industrial unit needs to submit a completion certificate to SIDBI in the prescribed format.

h) From the date of completion, up to two years, the industrial unit availing the Government financial assistance needs to submit operation and performance details to SIDBI.

i) In case the industrial unit becomes non-operational within two years of the receipt of Government financial assistance, the unit is liable to refund the money. Additionally, the industry will need to refund the financial assistance along with the interest.

How To Apply For The Fund

First of all, you have to apply to SIDBI/Banks/Financial Institutions for sanction of loan for the project. After an appraisal of the Project by SIDBI/Banks/Financial Institutions, you will need to submit the application.

If the loan application has not been submitted through SIDBI, two copies of the Application will be forwarded by the concerned Bank/Financial Institution to SIDBI along with a copy of the loan sanction letter and project viability report.

Read: Best Business Loans in India for Small Businesses

SIDBI will submit the proposals to the Steering Committee for necessary approval. The Steering Committee will convey the decision to SIDBI with a copy to the applicant MSME for necessary action.

After the sanction, you will need to sign an agreement with the SIDBI/Bank/Financial Institution sanctioning the loan in the prescribed format.

Where To Apply

Besides SIDBI, the following five banks/FIs are also the Nodal Banks for the purpose of this scheme.

  •  State Bank of Bikaner & Jaipur
  • Canara Bank
  • Bank of Baroda
  • Punjab National Bank
  • Bank of India

The Technology & Quality Upgradation Support scheme is the perfect option for small business entrepreneurs. However, you must have the proper credentials to apply for financial assistance.