Raw Material Assistance Scheme (NSIC)

What is the Raw Material Assistance Scheme?

The Raw Material Assistance Scheme is a credit-support programme of the National Small Industries Corporation (NSIC), a public sector enterprise under the Ministry of Micro, Small and Medium Enterprises. The scheme helps micro, small and medium enterprises finance the purchase of raw materials: both indigenous and imported — so that a small manufacturer can buy inputs in bulk without tying up its own limited working capital.

According to the NSIC scheme page, the assistance is provided against a bank guarantee and carries credit support for up to 180 days. In practice, NSIC pays the raw material supplier and the enterprise repays NSIC within the credit period. This lets a small unit take advantage of bulk-purchase discounts and cash-payment terms that it could not otherwise access.

Main features

• Financing of raw material purchases against a bank guarantee.
• Credit period of up to 180 days.
• Interest rates linked to the enterprise's NSIC performance-and-credit rating.
• Facilitation of bulk purchase, which can bring supplier discounts.

Who is eligible for the Raw Material Assistance Scheme?

You can apply if:

• Your enterprise is registered as a micro, small or medium enterprise with a valid Udyam Registration.
• You can furnish a bank guarantee from an approved bank to secure the sanctioned limit.
• Your enterprise has an acceptable financial and operational track record on NSIC's appraisal.

You cannot apply if:

• You are an individual with no registered enterprise seeking a personal loan, this is enterprise finance, not a personal-benefit scheme.
• Your unit cannot provide the bank guarantee that secures the facility.
• The enterprise does not clear NSIC's credit appraisal and unit inspection.

The facility is a business credit line, so eligibility turns on the enterprise's registration, financials and ability to give security, not on the personal category of the owner.

What are the interest rates and charges?

Interest is linked to the enterprise's NSIC rating (SME-1, SME-2 and so on) and to whether it is micro, small or medium. Per NSIC's rate chart effective 10 July 2026:

A processing fee of about 1.0% per year applies on new sanctions, with reduced fees on renewals for micro enterprises. Payment delayed beyond 180 days attracts a penalty of roughly 1.25% per quarter on the overdue amount. These figures change periodically, so always confirm the current rate at the NSIC branch or on the portal before signing the agreement.

What documents are required?

How to apply for the Raw Material Assistance Scheme

1. Obtain a Udyam Registration for your enterprise if you do not already have one.
2. Arrange a bank guarantee from an approved bank for the assistance limit you need.
3. Fill in the prescribed application form (available in PDF and Word on the NSIC website) and attach the constitution, financial and registration documents.
4. Submit the form to your nearest NSIC branch office, or apply online through the NSIC customer portal at custportal.nsic.co.in.
5. NSIC carries out a preliminary appraisal and unit inspection, then sanctions a limit and executes an agreement.
6. On sanction, NSIC disburses assistance by paying suppliers or the enterprise as per the agreement, and you repay within the credit period.

Help and contact

• NSIC contact: 011-26926275 (NSIC Bhawan, Okhla Industrial Estate, New Delhi)
• Customer portal: custportal.nsic.co.in
• Website: www.nsic.co.in

Interest rates, fees and credit terms are revised from time to time; verify the current schedule with NSIC before applying. NSIC does not require any middleman, and application forms are downloaded free from the official website.