Starting a footwear shop with a ₹2 Crore investment requires a bank-ready project report that goes beyond basic financials. This page provides a detailed project report for a footwear shop (NIC 47722) eligible for MUDRA Kishor, MUDRA Tarun, and CGTMSE schemes. The project cost includes ₹20 Lakh promoter margin and a term loan of ₹1.80 Crore, with an EMI of approximately ₹3,08,204 per month at 11% interest over 7 years. A professional report includes CMA data, DSCR calculations, and 5-year financial projections, crucial for loan approval from banks like SBI, PNB, or Canara Bank. This content is tailored for Indian entrepreneurs and CAs seeking practical guidance on eligibility, documentation, subsidy options, and step-by-step loan processing.
For a ₹2 Crore footwear shop, MUDRA Kishor (up to ₹5 Lakh) and MUDRA Tarun (₹5 Lakh to ₹10 Lakh) are not sufficient; however, they can be used for initial working capital. The primary loan falls under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises), which covers loans up to ₹2 Crore without collateral. Eligibility requires the business to be in the manufacturing or trading sector (footwear retail qualifies). The promoter must have a good credit score (preferably 750+), a viable business plan, and at least 10% margin money (₹20 Lakh). Banks also consider the location, market demand, and experience of the applicant. For women entrepreneurs, Stand-Up India can provide additional support, but the loan amount may be capped at ₹1 Crore. PMEGP offers subsidy for new units but is limited to ₹50 Lakh project cost, making it unsuitable for this scale. Therefore, CGTMSE is the most practical scheme for a ₹2 Crore footwear shop loan.
The total project cost of ₹2 Crore is broken down as follows: Land & Building (if not rented) ₹60 Lakh, Shop Interior & Fixtures ₹30 Lakh, Furniture & Display Units ₹20 Lakh, Initial Inventory (footwear stock) ₹60 Lakh, Machinery (if any, e.g., shoe repair) ₹5 Lakh, IT & POS System ₹5 Lakh, and Working Capital (3 months) ₹20 Lakh. Promoter's contribution is 10% i.e., ₹20 Lakh, and the bank loan is ₹1.80 Crore. The term loan is repaid over 7 years at an interest rate of 11% per annum, resulting in an EMI of ₹3,08,204 per month. The DSCR (Debt Service Coverage Ratio) should be above 1.5, which is achievable with projected annual net profit of around ₹30 Lakh after tax. Banks also assess the current ratio (minimum 1.33) and debt-equity ratio (preferably below 3:1). A detailed CMA (Credit Monitoring Arrangement) data sheet is essential for loan submission.
To apply for a ₹2 Crore footwear shop loan under CGTMSE, you need: KYC documents (Aadhaar, PAN, Voter ID), business proof (GST registration, shop establishment license, trade license), financial statements for the last 3 years (if existing business) or projected financials for new business, bank statements for the last 6 months, property documents (if land/building owned), and a detailed project report with CMA data. Additionally, a DIC (District Industries Centre) registration or Udyam Aadhaar certificate is required. For CGTMSE, no collateral is needed, but a personal guarantee of the promoter is mandatory. If applying under MUDRA, a simple application form with basic documents suffices, but for ₹1.80 Crore, a full project report is mandatory. Banks may also ask for a market survey report or demand analysis for the footwear shop location.
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Financing structured for a ₹2 Crore footwear shop: margin, term loan & EMI.
Scheme-ready for MUDRA Kishor, MUDRA Tarun, CGTMSE.
Exact means of finance, CMA, DSCR ≥ 1.50 in the generated report.
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Indicatively ≈ ₹3,08,204/month on the ~₹1.80 Cr term-loan portion (at 11% over 7 years), with ~₹20 Lakh promoter margin. The report computes exact figures.
Banks typically expect ~10% margin — about ₹20 Lakh for a ₹2 Crore project — plus any scheme subsidy.
MUDRA Kishor, MUDRA Tarun, CGTMSE fit this range. The report is configured to your chosen scheme.
The EMI is approximately ₹3,08,204 per month. This is calculated using the formula for a reducing balance loan: EMI = [P x R x (1+R)^N] / [(1+R)^N-1], where P=₹1,80,00,000, R=11%/12=0.009167, N=84 months. The total interest payable over 7 years is about ₹79,00,000. You can use an EMI calculator to verify.
Subsidies for such a large project are limited. PMEGP provides subsidy up to 35% for general category (max ₹17.5 Lakh) but only for projects up to ₹50 Lakh. For ₹2 Crore, no direct capital subsidy is available. However, you can claim benefits under GST input tax credit, and if located in a backward area, state-level subsidies may apply (e.g., under MSME policy). Interest subvention schemes like MUDRA do not apply for this amount. Focus on CGTMSE for collateral-free loan.
CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) provides a guarantee cover to banks for loans up to ₹2 Crore without collateral. For a footwear shop, this means you don't need to pledge property or assets. The guarantee fee is 0.75-1.5% of the loan amount, paid by the borrower. In case of default, the trust covers up to 75% of the outstanding amount. This makes loan approval easier for new entrepreneurs.
Typically, the process takes 4-8 weeks from application to disbursement. Steps include: submission of project report and documents (1 week), bank appraisal and site visit (2 weeks), credit committee approval (1-2 weeks), and sanction letter issuance (1 week). After acceptance, disbursement happens within 1-2 weeks. Delays can occur if documents are incomplete or if the business location requires additional verification.