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.

How to check your application status

Since the Raw Material Assistance Scheme is a bank-guarantee-backed credit facility rather than a one-time subsidy, tracking your case means following it through NSIC's appraisal and sanction stages rather than watching a single online status bar. Use whichever channel matches how you applied.

If you applied through the NSIC customer portal (custportal.nsic.co.in):

1. Log in with the credentials created at the time of registration.
2. Open the dashboard section that lists your applications or sanctioned limits.
3. The entry will show which stage your case is at, such as under scrutiny, sent for unit inspection, sanctioned, or returned for corrections.
4. If the portal shows no movement for several weeks, do not simply wait; raise a query through the portal's contact or grievance option.

If you applied offline at an NSIC branch office:

1. Note the acknowledgement or application reference number given at submission; keep it for every follow-up.
2. Call or visit the same branch, since the officer who logged your file is best placed to check its physical movement between appraisal, inspection and sanction.
3. Call the NSIC head office helpline (011-26926275) if the branch is unresponsive or if you were not given a clear reference number.
4. Ask specifically whether your file is awaiting the unit inspection, a bank guarantee confirmation, or internal sanction approval, since each stage has a different owner and a different likely delay.

After sanction:

Once NSIC sanctions a limit and executes the agreement, status tracking shifts from "is my application approved" to "how much of my limit is utilised and repaid." This is tracked through the statements and running account NSIC maintains against the bank guarantee, not through a public tracking number, so keep in touch with your branch office for utilisation and repayment statements rather than expecting an online tracker for the running facility.

Common reasons for rejection

Applications and renewal requests under this scheme are turned down, or held up indefinitely, for a small number of recurring reasons. Each has a concrete fix.

• No valid Udyam Registration, or registration under the wrong category. NSIC only extends this facility to enterprises formally registered as micro, small or medium under Udyam. A lapsed, incomplete or mismatched registration (for example, a category that does not match the actual scale of operations) stalls the file at the first scrutiny step. Fix: renew or correct the Udyam Registration before applying, and make sure the category matches your investment and turnover figures.

• Bank unwilling or unable to issue the guarantee NSIC requires. The entire facility runs on a bank guarantee from an approved bank; if your bank declines to issue one for the amount you have requested, or issues it on terms NSIC does not accept, the application cannot proceed regardless of how strong the rest of the file is. Fix: confirm with your bank in advance that it will issue a guarantee of the required value and format, and align the requested assistance limit with what your bank guarantee actually supports.

• Weak or unclear financial statements. NSIC appraises the enterprise's financial and operational track record before sanctioning a limit. Missing audited financial statements, inconsistent figures between the application and the balance sheet, or a recent history of losses without explanation commonly lead to a lower rating or outright rejection. Fix: submit complete, audited financial statements for the latest year(s) and be ready to explain any dip in performance during the inspection.

• Incomplete constitution documents. Partnership firms, companies and proprietorships each need different proof of legal existence: a partnership deed, memorandum and articles of association, or proprietorship proof respectively. Submitting the wrong document for your entity type, or an unsigned or outdated one, is a frequent cause of files being sent back rather than rejected outright, which still delays sanction. Fix: check which constitution document applies to your specific entity type before submission, and ensure it is current and properly executed.

• Unit inspection reveals a mismatch with the application. NSIC's appraisal includes a physical inspection of the unit. If the inspecting officer finds the unit is not operating as described, is significantly smaller in scale, or does not actually need the raw materials specified in the application, the case is usually declined at that stage. Fix: ensure the application accurately reflects the unit's current scale and genuine raw material requirement, since overstating the requirement to get a larger limit is the fastest way to fail inspection.

• Existing dues or a poor repayment history with NSIC. An enterprise with overdue amounts from an earlier NSIC facility, or a history of repayments made only after the 180-day credit period and the accompanying penalty, is a weaker candidate for a fresh or renewed limit. Fix: clear any outstanding dues before applying for a fresh sanction, and if renewing, ensure the previous cycle was repaid within the credit period.