With a significant contribution to the country’s socio-economic objectives, employment generation, as well as, supporting entrepreneurial ventures, the MSMEs or Micro, Small, and Medium Enterprises have played a pivotal role in driving India’s growth story.
- The total number of registered MSMEs in India increased from 18.70 lakh to 22.06 lakh between FY19 and FY20.
- MSMEs account for about 45% of the country’s manufacturing output and 40% of its total exports.
With such figures holding testament to their contributions, MSMEs have certainly created an avenue for every business person in India to embark on their entrepreneurial ventures. Furthermore, with the easy availability of financing through MSME loans, propagating the growth of small businesses has also become easily achievable, making it more straightforward for businesspersons to start or keep their entrepreneurial pursuits functional.
Followings are benefits of MSMEs and why every businessperson in India needs to learn about them.
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MSME Benefits and Advantages
Before delving into the MSME benefits, read the full article and learn what is MSME.
As its name suggests, MSMEs collectively represent all the micro, small, and medium industrial units in India. These comprise businesses in the country’s manufacturing and services sector whose investment in plant, machinery, and equipment do not exceed a specific limit.
Nonetheless, to avail the status of a Ministry of Micro, Small & Medium Enterprises, businesses fulfilling the requisite criteria have to undergo registration under the MSME Act.
Companies that have acquired this registration can enjoy the following benefits –
- Such enterprises can enjoy up to 50% subsidy on industrial promotion and patent registration.
- MSMEs registered under the Act can avail a 1% benefit on the overdraft facility under the purview of the Credit Guarantee Trust Fund Scheme.
- Such businesses can avail protection against delayed payments.
- They are eligible to enjoy concessions on electricity bills.
- These business owners can avail collateral-free Ministry of Micro, Small & Medium Enterprises loans as an efficient financing solution for MSMEs under schemes introduced by the govt. As well as other financial institutions across India at attractive interest rates.
With such benefits and more, Ministry of Micro, Small & Medium Enterprises make for ideal options for entrepreneurs and businesspersons to venture into.
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How are Ministry of Micro, Small & Medium Enterprises loans beneficial?
One of the main reasons why every businessperson in India should know and consider MSMEs as prospective business ventures are because of the easy financing availability. It is one of the factors that can effectively help them find the business niche to invest in.
Offered under various government schemes and by other financial institutions alike, these business loans can help to meet any funding requirements of these ventures without hassle.
The Mudra loan under the aegis of Pradhan Mantri Mudra Yojana, for instance, is one of the most popular government-sanctioned options that small business owners can avail to fund their entrepreneurial pursuits.
There were 622,37,981 total PMMY loans sanctioned between FY2019 and FY2020.
These Ministry of Micro, Small & Medium Enterprises loans can be availed up to a maximum amount of Rs.10 lakh. Business owners with higher capital requirements can consider other business loan options to meet their organization’s funding requirements effectively.
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Most notable features of these unsecured loans are as follows –
- They come with a high-value amount of up to Rs.30 lakh.
- They are available without any end-use restrictions and can be used to fund any number of financial requirements.
- With minimal eligibility criteria and documentation requirements to get the business loan, availing them is hassle-free.
Financial institutions like Bajaj Finserv also bring pre-approved offers that streamline the process to avail them. These type of offers are available on several financial products, including business loans, personal loans, and the likes. Anyone can check his/her pre-approved offer by providing your name and contact number.
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MSMEs, thus, makes for a significantly promising sector for businesspersons in India looking to venture into a new pursuit. Nonetheless, one should learn extensively about Ministry of Micro, Small & Medium Enterprises registration and other such requirements before deciding to invest in such a business.
For more information visit https://msme.gov.in/
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