MSME Loan Schemes by HDBFS: Empowering India’s Small Businesses

India’s Micro, Small, and Medium Enterprises (MSMEs) are the bedrock of the country’s economy, contributing approximately 30% of GDP. They usher innovation and facilitate employment creation across urban and rural markets. As a sizable contributor to the economy, MSMEs often struggle to access formal credit from national and global banking institutions. This is primarily due to their informal structures, lack of collateral, or the unpredictable cash flow they or their clients may experience.

This structure has resulted in financial institutions and the Government of India developing targeted MSME loan schemes; focused credit solutions for MSME financing. These schemes allow borrowers working capital, moving capital, or refinancing for short-to-medium term requirements.

HDB Financial Services (HDBFS), a leading NBFC and subsidiary of HDFC Bank, plays a crucial role in enabling financial inclusion through its agile and accessible MSME loan scheme offerings. HDBFS venture product offerings are targeted at today’s micro and small enterprise businesses and serve them with flexibility, digital distribution-relative ease of access and documentation minimization for speed and convenience. Whether you are a self-employed person, trader, retailer, or service provider, HDBFS has unstructured and structured solutions to accommodate your growth path.

What Are MSME Loans?

An MSME loan is a credit facility for a business that has been classified by the Ministry of MSME, Government of India as either micro, small, or medium. These businesses are often defined as having a relatively small turnover and the amount of investment made in the plant and machinery. MSME loans are crafted to support:

• Working capital requirements
• Business expansion
• Machinery and equipment purchase
• Inventory procurement
• Debt consolidation

MSME Classification (as per revised RBI guidelines):

Enterprise Category	Investment (Plant & Machinery)	Annual Turnover
Micro Enterprise	Up to ₹1 crore	Up to ₹5 crore
Small Enterprise	Up to ₹10 crore	Up to ₹50 crore
Medium Enterprise	Up to ₹50 crore	Up to ₹250 crore

Traditional lending systems typically do not support the necessary speed and scale MSMEs require, leading to purpose-built loans for MSMEs as the best vehicles for encouraging growth, particularly with innovative NBFCs such as HDBFS. In addition to unsecured funding options, these schemes provide the borrower with quick decisions at a reasonable borrowing expense without the borrower assuming unnecessary burdens.

Overview of HDBFS MSME Loan Scheme

The MSME loan scheme from HDBFS offers diverse loan products tailored to business owners’ funding cycles. With flexible repayment, competitive rates, and doorstep service, HDBFS makes access to finance seamless.

Product Variants

• Unsecured Business Loans: ₹1 lakh to ₹7.5 lakh
• Enterprise Business Loans: ₹7.5 lakh to ₹30 lakh
• Secured Loans: Up to ₹50 lakh with property collateral

Key Features

• Loan Tenure: 12 to 60 months
• Interest Rate: Competitive, profile-based (typically 8%–36% p.a.)
• Repayment: EMI in advance or arrears
• Collateral: Not required for loans up to ₹30 lakh
• Disbursal Time: Fast-track process with minimal turnaround

Why This MSME Loan Scheme Stands Out

HDBFS brings a technology-enabled lending experience tailored to MSME needs:

• Fully Digital Processing: End-to-end application via HDB On-The-Go App or online platform
• Flexible Documentation: Reduced paperwork compared to traditional banks
• Customized EMI Plans: Borrowers can select an EMI structure based on business cash flow
• Field Assistance: Doorstep collection and loan servicing support
• Wide Eligibility Net: Covers manufacturers, traders, professionals, and service-based enterprises

These features make HDBFS’s MSME loan scheme not only accessible but strategically aligned with the financial rhythm of MSMEs.

Eligibility Criteria & Required Documentation

Eligibility

• Age: 21–65 years
• Business Vintage: Minimum 3 years of operational history
• Annual Income: ₹75,000 – ₹1 lakh or more (varies by segment)
• Professionals (Doctors, CAs, Architects, etc.): Must be practicing for 3+ years

Documentation

• KYC: PAN card, Aadhaar, Voter ID, Passport
• Financials: ITRs, P&L statements, balance sheets (last 2 years)
• Bank statements: Last 6 months
• Business Proof: Trade license, shop act, GST certificate, utility bills
• Ownership proof (for secured loans): Property documents

This simple and structured documentation process ensures quicker approval under the MSME loan scheme with minimal friction.

Step-by-Step Application Process

Applying for an MSME business loan via HDBFS is quick and simple:

1. Initiate Application: Visit the HDBFS Business Loan Page and fill out the application form with basic details such as loan amount, loan tenure, and business type.
2. Upload Documents: Scan and submit documents such as income proof, bank statements, and business documents online.
3. Verification & Credit Assessment: HDBFS leverages automated underwriting systems, alternate data, and credit scores to evaluate eligibility.
4. Loan Approval & Disbursal: Once verification is complete, you will be informed of your loan approval promptly, and funds are disbursed electronically into your business account.
5. Post-Loan Servicing: Customers receive EMI schedules, digital receipts, and periodic servicing support. Top-up loans may also be available for eligible borrowers.

Advantages of Choosing HDBFS for Your MSME Loan

• Collateral-Free Options: For loans up to ₹30 lakh
• Quick Turnaround: Approvals within days
• Digital Convenience: Paperless application, doorstep service
• Tailored Solutions: Products for every business model—manufacturing, trading, services
• Scalable: Top-up and renewal options as business grows

These benefits make the MSME loan scheme by HDBFS one of the most competitive offerings for small business owners in India today.

Empower Your Enterprise Today

India's economic growth is based on the strength of its MSMEs. HDBFS’s MSME loan scheme provides both agility and accessibility, giving your business the stimulus to scale up with confidence. Whether you want to upgrade your infrastructure, grow your operations, or stabilize your cash flows, HDBFS has a finance solution that is right for you.

Apply now and unlock business potential with your trusted financial partner.

Explore HDBFS Business Loan Options

Source:

• Ministry of MSME Annual Report 2022–23 (PDF) – Page 5 & 6
• Government of India, Ministry of MSME website: https://msme.gov.in