What is the "Raw Material Assistance Scheme"?

NSIC arranges to provide raw material as per the specific needs of MSME units, financing the purchase of raw materials (indigenous and imported).

Who can avail assistance under the Scheme?

Any Manufacturing/Service MSME with a Udyam Registration Certificate.

Does NSIC facilitate procurement of raw materials for trading activities?

No, trading activity is not allowed under this scheme.

Does NSIC facilitate raw material procurement against advance payment or on credit?

Both — against advance payment and on credit, as per the MSME's requirement.

Is there a ceiling on the limit sanctioned?

Maximum exposure to a single unit: ₹1000 lakh (manufacturing), ₹600 lakh (service), ₹500 lakh (infrastructure). Group ceiling: ₹2000 lakh (manufacturing), ₹1500 lakh (service), ₹500 lakh (infrastructure).

What is the validity of limits sanctioned?

One year, renewable for a further year subject to satisfactory conduct.

How does NSIC provide credit support?

The unit submits a proforma/original invoice or material receipt note; NSIC releases payment to the supplier (not the MSME), up to 95% of the Bank Guarantee value.

What is the credit period?

180 days, extendable on request with Zonal Head consent if within the Bank Guarantee limit.

What is the interest rate if repayment is not made within 180 days?

1.25% per quarter additional, on top of the normal rate.

Raw Material Assistance Scheme – Up to ₹10 Cr

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आवेदन प्रक्रिया

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Obtain Application Form
Download the prescribed application form from NSIC's website or collect it from a branch office.
आप
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The Raw Material Assistance Scheme, launched by the National Small Industries Corporation (NSIC) under the Ministry of MSME, is a crucial initiative designed to empower Micro, Small and Medium Enterprises across India. Its primary objective is to alleviate working capital challenges faced by MSMEs in procuring essential raw materials, both from domestic and international sources. By financing these purchases directly to suppliers, NSIC enables MSMEs to maintain continuous production cycles and focus on manufacturing high-quality products without the burden of upfront raw material costs. This credit facility is structured to support MSMEs in leveraging economies of scale, such as bulk purchases, and benefiting from cash discounts, thereby enhancing their operational efficiency and competitiveness. It's a strategic intervention aimed at strengthening the backbone of India's industrial sector by ensuring a smooth supply chain for MSMEs, which are vital contributors to economic growth and employment generation.

The Raw Material Assistance Scheme provides crucial financial support for MSMEs to procure both indigenous and imported raw materials. This repayable credit facility offers up to ₹20 crore (group level) or up to ₹10 crore (single manufacturing unit) for a credit period of up to 180 days. Beneficiaries can avail competitive interest rates, starting from 8.75% p.a. for Micro units with valid SME 1 rating (up to 10.25% p.a. for other units). The scheme also enables MSMEs to benefit from economies of purchase, such as bulk buying and cash discounts, directly from suppliers, improving their cost efficiency and competitiveness. This direct payment to suppliers by NSIC, against a Bank Guarantee, streamlines the procurement process and frees up MSMEs' working capital.

Raw Material Assistance Scheme

Raw Material Assistance Scheme

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