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The West Bengal Self-Help Group and Self-Employment Minister Sadhan Pande has just unveiled a unique loan scheme for micro, small and medium enterprises (MSME). An MSME entrepreneur will need to pay back only Rs 70,000 if he or she takes a loan of Rs 1 lakh to start a business!

Also read: Budget 2017: What the MSME sector said about Arun Jaitley's announcements

According to local reports, the scheme under which this unique loan will be given is called "Nijer Paye Dara," which roughly translates to "stand on your feet," and will be introduced in the fiscal year 2017-18. The scheme is aimed primarily at youngsters in rural areas, many of whom have been flocking to the cities to earn a living.

The scheme aims to increase self-employment — which will automatically reduce unemployment — and also reduce the stress on urban centres people from villages flock to for livelihood opportunities. It also encourages rural art and handicraft, besides promoting businesses whose products and services cater predominantly to villagefolk or local residents.

Details of the scheme

Pande has been quoted by local reports as saying that for a person to benefit from the scheme, the loan has to be availed from the bank through only the Self Help Group and Self-Employment Ministry. In that case, the person availing the loan will need to pay back only Rs 70,000 for every Rs 1 lakh borrowed, with the remaining Rs 30,000 coming from the West Bengal government in the form of a grant.

Pande added that an MSME entrepreneur can avail of as much as Rs 5 lakh in such loans, and as per the aforementioned details will need to pay back only Rs 3.5 lakh, with the remaining Rs 1.5 lakh coming from the state government as a grant.

The loan can be utilised to set up computer, tailoring, grocery, utensil and other kinds of shops, as well as units that manufacture earthen goods and leaf-made disposable utensils, among other things.