Raw Material Assistance Scheme
By National Small Industries Corporation (NSIC)
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Quick Answer
Repayable credit from NSIC for MSMEs to buy indigenous and imported raw materials, paid directly to suppliers, up to ₹20 crore at group level.
- Funding amount
- Up to ₹10Cr
- Funding type
- Debt
- Application deadline
- Rolling
- Location
- Open to startups registered in India
- Registrations needed
- Udyam registration
About this loan
NSIC's Raw Material Assistance Scheme gives Micro, Small and Medium Enterprises (MSMEs) repayable credit to buy indigenous and imported raw materials. It is run by the National Small Industries Corporation (NSIC) under the Ministry of MSME.
NSIC pays the suppliers directly, so you do not fund the purchase upfront. That eases working-capital pressure and lets you buy in bulk and take cash discounts. Credit goes up to ₹20 crore at group level or ₹10 crore for a single manufacturing unit, for up to 180 days.
Manufacturing and service MSMEs can apply. You need a valid Udyam Registration Certificate. Trading activities are not allowed.
Eligibility
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Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Grant providers
The National Small Industries Corporation Ltd. (NSIC) is a Schedule - A, Government of India Enterprise under the Ministry of MSME, established in 1955. It works to promote, aid, and foster the growth of MSMEs in India. NSIC provides technical support through its Technical…
Learn moreBenefits & Funding
- Amount
- Up to ₹10Cr
- Fund type
- Debt
- Equity
- Equity-free
- Repayment
- Repayable
What You Get
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.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
NSIC conducts a preliminary appraisal of the submitted applications. This typically involves a thorough review of the company's financial health, operational stability, and overall business viability, as evidenced by the submitted documents. A unit inspection may also be carried out to verify the operational aspects and infrastructure of the MSME. The selection committee, comprising NSIC officials, evaluates the creditworthiness and adherence to the scheme's eligibility criteria. Sanction of the credit limit is contingent upon a satisfactory appraisal and the unit meeting all stipulated requirements.
Application Process
- 1
Obtain Application Form
Download the prescribed application form from NSIC's website or collect it from a branch office.
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How to apply
Four steps from draft to disbursement — one action each.
- 1
Draft your application
Answer the form inside the grant tracker — AI drafts each response using your past answers, so you're not starting from a blank page.
- 2
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 3
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 4
Submit on the official portal
Use the official application link and verify all details before final submission.
- 5
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Frequently Asked Questions
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.
Sources
Data on this page is compiled from official program and provider references.
