What is MSME?

Let us know what is the definition of MSME. Micro, Small and Medium Enterprises (MSME) is a very important link in terms of employment and economy in our country. The Micro, Small and Medium Enterprises Development Bill-2005 (which was introduced in the Parliament on May 12, 2005) was made the MSME-2006 Act after the assent of the President. This act has been named the Micro, Small and Medium Enterprises Development Act, 2006.

MSME is an enterprise sector. This sector is of two types.

1- Service Sector: The sector in which the work of providing service is done is called the service sector.

2- Manufacturing Sector: The sector in which the work of making products is known as manufacturing sector.

Definition of micro industry

The industry with investment up to 1 crore and turnover up to 5 crore has been given the status of micro enterprise. Both manufacturing and service sectors.

Definition of small scale industry

Enterprises with investment up to 10 crores and turnover of 50 crores are considered as small units. Both manufacturing and service sectors.

Definition of medium industry

Those with an investment of up to 30 crores and a turnover of 100 crores have been considered as medium enterprises. Both manufacturing and service sectors.

What is MSME loan?

MSME stands for Micro, Small and Medium Enterprises. (MSME) loan is a type of business loan offered by banks / lending institutions to individuals, SME, MSME and start-up enterprises. The loan provided to MSME is called MSME loan. MSME loans are used by business owners and enterprises to meet their working capital requirements, manage cash flow or expand their business, etc. Many lending institutions/banks provide SME and MSME loans to their customers without collateral or any security. The business of the Micro, Small and Medium Enterprises (MSME) sector can be run properly, The central government is making efforts for this. In this sequence, efforts are made to provide loans to MSME traders in an easy way. MSME loan is available from all government and private banks of the country as well as non-banking institutions ie NBFC companies.

In this article we will talk about how to take MSME loan or how you can get MSME loan? Following are the MSME loan schemes and other related information.

Benefits of MSME Innovation, Ideas Portal (MSME Innovation and Research Portal Benefits)

Features and Benefits of MSME Loan

The business loan that is provided to meet the short and long term business needs of MSME ie Micro, Small and Medium Enterprises is called MSME loan.

Through MSME loan, the business of MSME sector meets its working capital (working capital), capital expenditure (capital expenditure) and non-fund (non-fund) requirements.

• The main advantage of this web portal is that it will reveal the people with new ideas hidden in India who can take the country towards progress.

• Innovate in India along with Make in India will play an important role in contributing to the progress of the country.

• This web portal will also prove to be very helpful in facing the challenges coming in the country and getting rid of them.

• If the new ideas born in the country do not come in front of everyone, then gradually the progress of the country will stop, so it is beneficial to have new ideas.

• Due to China, the whole world which is suffering in today's time and about all the things coming from China, people will express their views through this web portal, due to which the country will also get an important public opinion towards China. .

This step taken by the Central Government will encourage not only the country but also the citizens of the country. They will also feel encouraged and proud when a new initiative with the idea shared by them is launched in the government or large industries. In such a situation, the citizens of India will also be able to make a major contribution in giving the country's economy a better shape. With this, not only the present generation but also the future generation will feel proud to share their new ideas. Through this web portal, the central government will easily be able to create some unheard ideas by combining new and old ideas by connecting four generations together. Therefore, really through this portal, the central government will definitely be able to succeed in giving a new look to India by combining Innovate India with Make in India.

Documents Required for MSME Loan

• business plan

• Aadhar card

• Any one proof of residence identity issued by the government

• Proof of belonging to SC/ST or OBC, if applicable

• age proof

• pan card

• Bank statement of last 12 months

• Copy of license and business registration certificate, if required

• If the business is already running, then copy of the balance sheet of profit and loss of the last 2 years

• GST certificate

• No Objection Certificate (NOC)

• Application form with passport size photograph

• KYC documents of the applicant and co-applicants including Passport, Aadhaar Card, Voter ID, Driving License, PAN Card and utility bills (telephone, electricity)

• Amount of income

• Proof of Business Address

• Any other document required by the loan institution

Eligibility Criteria for MSME Loan / SME Business Loan

Who gets MSME loan- What is the eligibility?

To apply for MSME loan, it is necessary to check the eligibility first. Because only by eligibility it is known whether the loan will be available or not. Different banks follow different eligibility criteria for MSME loans. Although there is not much difference in eligibility. The eligibility criteria is something like this:

• Applicant age should be between 18 years – 75 years

• Business must be at least 3 years old

• Must have CA certified / audited balance sheet

• The nature of the business for which the loan application is being made should be that of Proprietorship / Partnership / Private Limited Company / Limited Company / LL.

• Loan is eligible for: Individuals, SMEs, MSMEs, Businesses, Women entrepreneurs, Self-employed professionals, People falling under SC / ST / OBC category, Traders, Artisans, Retail traders, Businesses engaged in service and manufacturing sectors

• Business turnover: ₹10 lakh for current business, depending on bank to bank

• Must have good payment record and financial stability

• CIBIL score above 750

• Should not have defaulted with any loan institution.

Under which government scheme MSME loan is available?

Through MSME loan, it is the endeavor of the Central Government to create an atmosphere of self-employment in the country. Due to this, all such schemes are being run by the government in which MSME loans are given. The government loan schemes in which MSME loans are available are as follows:

SME/ MSME loan schemes launched under the Ministry of MSME are offered by various banks and NBFCs to Micro, Small and Medium Enterprises (MSMEs). Given below are the popular MSME loan schemes offered by banks and launched by the Government of India:

• CGTMSE: Credit Guarantee Fund Trust for Micro and Small Enterprises

• CLSS: Credit Linked Capital Subsidy Scheme

• credit guarantee scheme

• Mudra Loan Scheme under PMMY

• National Small Industries Corporation (NSIC) Subsidy

• PMEGP: Prime Minister's Employment Generation Program

• PMRY: Prime Minister's Employment Scheme

• PSB Loan in 59 Minutes

• Standup India

• startup india

• Prime Minister's Employment Generation Program (PMEGP)

• Women Entrepreneurs Scheme

• micro credit scheme

• currency card

• Equipment Finance Scheme

MSME loan can be obtained under all these schemes.

MSME Business Loan Without Collateral / Security 

MSME Business Loan is availed by customers to meet their working capital requirements and to expand their business. MSME loans for new business that are offered by banks are mostly unsecured business loans, as no collateral / security is taken from the borrower against this type of loan.

Collateral Free MSME Loans without collateral / security are offered at competitive interest rates that can be easily repaid as EMIs. Collateral/ security-free loans are generally short-term loans that can be repaid within a period of 12 months, and can go up to 5 years depending on the business requirements.

The loan amount will depend on the profile, repayment capacity and financial stability of the applicant. Most of the banks like private and public sector banks, Non-Banking Finance Companies (NBFCs), Regional Rural Banks (RRBs), Small Finance Banks (SFBs) and Micro Finance Institutions (MFIs) offer MSME loans without collateral/security.

Purpose of MSME loan

• Meet working capital requirements

• to grow business

• to manage cash flow

• To buy new equipment or machinery

• For purchase of raw materials, vehicles, equipment, etc.

• to stock inventory

• For payment of rent, payment of salary etc.

How to get MSME loan?

MSME loan is available in the same way as other loan is available. It means to say that for small scale industry loan also one has to apply through proper channel by following a fixed procedure. Before applying for the loan, it is mandatory to check the eligibility and collect the necessary documents.

After checking the eligibility and collecting the documents required for the MSME loan, then the MSME loan application has to be made. MSME loan can be applied through both online and offline mode.

What is the MSME Online Registration Process?

(MSME Online Registration Process)

How you can register online on this web portal by filling your form and submitting it, let's know the whole process :-

• A website portal has been issued by the Central Government under this scheme, whose link is ideas.msme.gov.in/ , you have to click on it.

• As soon as you click on the website link, its home page will open in front of you, from where you will have to click on 'Share Now'.

• After this, where will you go to log in to it, so before that you must be registered in it.

• For this, you can register yourself by clicking on the 'New User Registration' link given below.

• As soon as you click on that option, a form will appear in front of you, which you will have to fill completely with your correct information.

• After filling it, you will also have to create a password on that website portal, for which you will have to enter the password again to confirm it.

• After this, you will also have to fill the information related to your place of residence correctly in this form.

• When you fill all the information in the form completely, then you will see a verification code below. After filling which, at the end, after clicking on the button of 'Create New Account', you will be registered in the website of MSME.

• Apart from this, if you want to register yourself with Udyog Aadhaar, then you will be asked whether you want to fill this form through your Aadhaar card, or through mobile number or your email ID.

• If you want to fill the given form with your registered mobile number or email id. So in this form you have to fill your information. And if you want to fill this form with Aadhaar, then enter your Aadhaar number there.

• Finally, after entering the verification code, click on the 'Create New Account with Udyog Aadhaar' button. With this, you will be registered as an industry in this.

• Once your or your industry's account is created in this website, then after that you can share your thoughts in it.  

How to apply for MSME loan?

To apply for a business loan, applicants can check and compare various loan options to suit their business needs. Follow the steps given below to apply for a business loan by clicking on 'Business Loans' on the homepage of the website.

• Fill in all the required details like loan amount required, employment status, annual sales or turnover, city of residence, number of years in the current business, collateral/security type and mobile number

• Tick ​​the box below to agree to the terms and click on “Unlock Best Offers” next

• Apart from this, you have to enter details like Company Type, Nature of Business, Industry Type, Net Annual Profit, Bank Account, Any Existing EMI, Full Name, Gender, Residence Pin Code, PAN Card No., Date of Birth and Email ID

• After submitting all the details, a representative of the bank will get in touch with you for loan formalities

• Once your loan application is approved, the sanctioned loan amount will be transferred to your bank account within stipulated working days.

MSME / SME loan interest rates offered by various private and public sector banks, NBFCs, Small Finance Bank SFBs, Regional Rural Banks (RRBs) and Micro Finance Institutions (MFIs), nature of business and repayment tenure, profile of the applicant, Based on various factors like payment record, repayment capacity, loan amount.

MSME Loan Interest Rate – 2022

Note: The mentioned interest rates, fees and charges depend on the discretion of the bank, NBFC and RBI. GST will be levied extra on the mentioned charges

MSME Loan – Features, Fees and Interest Rates

Note: All interest rates, fees and charges mentioned above are subject to change and at the sole discretion of the Bank / NBFC and RBI. GST & Service will be levied extra on the above charges.

For General Enquiries: 

011-23063288/011-23063643

MSME Toll-Free No: 1800-123-7376

Some new business ideas to earn quick money 

As new ideas are coming in the market, earning money has become easier than before. A person with a good financial condition creates a strong independent image of himself, which increases his confidence. If you also want to do such a business from which you can earn money quickly, then read this article for this. Following are some business ideas to earn money:

1. Freelancing Professionals:

Freelancing is one of the options to earn quick money, as the freelancer gets paid after the completion of the project. Freelancer can choose his/her project as per his/her interest. The trend of freelancing is increasing rapidly, because in this you work according to your wish, no one is your boss and you can decide the fees according to the work.

2. Food and Beverages:

Anywhere in the world, if anyone is planning to do food related business, there are high chances that he/she will get profit. But the benefits depend on the quality and type of food. To improve this business, your menu should be kept according to the environment of that place. Local culture can be added to the food so that the attraction of people increases towards it.

Another option can be lunch box or tiffin service for the people living in the city for the purpose of job or study or work from other city or state. If cooked food is given in Tiffin / Lunchbox service with good quality at an affordable price then good profit can be earned.

3. Blogging:

If you are someone who loves writing and are unable to find a publisher for your work, then you can create your own blog and write your articles there. You can easily make profit from your blog. Creating your blog does not require any special skills, but it is most important that you have good knowledge about what you write. Also try to write on trending topics and put high trending keywords in your blog, in this way more visitors can come to your blog.

4. Boutique:

In India, earning through boutique is increasing day by day and this business can be started even in a small room or empty space at your home. All you have to do is decide for whom you want to make clothes. After that you will have to hire a cutting master and craftsmen to stitch the clothes. You can get tailored from ethnic to western clothes. Nowadays, as fast as the fashion trends keep changing, you will not be short of customers and you will be able to give them well stitched dresses on time.

5. Digital Marketing:

Referral marketing is one of the growing businesses chosen by young people. The technique of 'word-of-mouth' is most useful in convincing the customers about the quality and features of the goods. There are many companies like Amazon, Amway who need digital marketing platform to reach large number of customers to grow their business. The more orders you place on them, the more you earn. Because you do marketing for many products of one or many companies. All this work can be done through social media and networking websites.

6. Custom Jewelry:

Youngsters these days are opting for custom made jewelery instead of buying showroom made jewellery. To help customers choose the jewelry they like, you can show them the jewelry design, and help them pick the jewelry they like. The idea of ​​custom jewelry is to make the customers feel that they are special. The customers are ready to pay a good amount for these jewellery. So, it is also an idea to earn easy and fast money in India.

Related Questions (FAQs)

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Question. Is MSME registration voluntary or mandatory?

Answer: MSME registration is completely voluntary and the benefits offered under it are availed by the businesses.

Question. Is credit score important for MSME in getting MSME loan?

Answer: Yes, having a good credit score is always beneficial for an MSME.

Question. What is the validity of Provisional Registration Certificate (PRC)?

Answer: The validity of Provisional Registration Certificate (PRC) is 5 years.

Question. What support is available for technology upgrades?

Answer: The Government of India and the Ministry of MSME run the Credit Linked Capital Subsidy Scheme (CLCSS) which assists MSME enterprises in the country for technology upgradation. Provides 15% capital subsidy to eligible MSME enterprises to improve and upgrade technology as per industry standards. The maximum subsidy that can be availed by an enterprise is to the extent of Rs.15 lakhs. To avail these services, individuals may approach the nearest nodal agency / financial institution.

Question. What is the MSME loan interest rate offered by SBI?

Answer: The MSME loan interest rate offered by SBI is 8.30%.

Question. How much is the MSME registration fee?

Answer: MSME registration is free and getting MSME certificate is also absolutely free.

Question. Is there any validity of MSME certificate?

Answer: The validity of MSME certificate is 5 years.

Question. What is the advantage of the tool-room provided by the Ministry?

Answer: Ministry of MSME provides hi-tech tool-room to MSME enterprises so that their products and services can carve a niche for themselves in the market. The Tool-room initiative of the Ministry of MSME also provides trained artisans etc. to the enterprise.

Question. Which businesses come under MSME?

Answer: MSME Industry List 2021

• Flour Mill

• toilet soap manufacturing

• tomato sauce making

• Roasted Rice Flakes

• Banana Fiber Extraction And Weaving

• computer assembling

• Light Engineering (Nuts, Bolts, Washers, Rivets etc.)

• Metal-based industries: agricultural implements, cutlery and hand tools

Question. What is meant by MSME?

Answer: MSME stands for Micro, Small and Medium Enterprises. They contribute about 29 percent to the country's gross domestic product (GDP). MSME sector is the biggest source of employment in the country.

Question. What are the documents required for MSME / SME loan?

Answer: To apply for MSME / SME loan, here are the documents you need:

• KYC document

• Proof of Business Ownership

• profit and loss statement and balance sheet

You may also be asked to submit additional documents, if required.

Question. Who is eligible for SME/MSME loan?

Answer: Applicants who are running the business for at least 2 years can apply for MSME loan. They should be in the age group of 24 to 75 years and their business should have submitted IT (Income Tax) returns for at least 1 year.

To be eligible for the loan, these are the simple criteria:

• Nationality: Indian

• Business Vintage: At least 3 years

• Age: 24 to 75 years* *Age at the time of loan maturity should be 70 years
  

• Employment Type: Self Employed

• CIBIL Score: 685 or above

Question. Is MSME loan also available for starting a new business?

Answer: Absolutely. MSME loan is available under the Prime Minister Employment Generation Program (PMEGP) scheme to start a new business.

Question. Who can take MSME loan?

Answer: Corporates, self-employed professionals and self-employed non-professionals such as proprietors, retailers, traders and others can avail MSME loans from ZipLoan