From Make in India to Startup India, the Modi government has taken multiple initiatives to promote small and medium businesses. To understand the schemes and their impact on different businesses, it is vital to understand what is MSME.
The Ministry of Micro, Medium and Small Enterprises constitutes the observing body of business in India. Such firms comprise small businesses, which are often localised or budding start-ups. Even different types of handicraft industries come under this group.
With SME full form referring to Small and Medium Enterprises, the different government initiatives over the last few years have primarily focused on them.
The most crucial of these initiatives are discussed underneath –
One of the biggest troubles faced by SMEs is that of adequate finance. Be it launching a company or upgrading its technology, small businesses require different types of capital financing to run their production and service smoothly.
Consequently, the government of India launched several business loan schemes to aid these types of businesses –
- MUDRA: An initiative set up by the Modi government to aid small and medium businesses, 3 types of loans are offered to micro-businesses dealing with manufacturing under it. The lowest slab is that of “Shishu”, which offer loans up to Rs.50,000. In the case of “Kishor”, the loan amount goes up to Rs.5 lakh. The last slab is known as “Tarun”, which offers to finance up to Rs.10 lakh.
- MSME Loans in 59 minutes: This MSME loan scheme was launched by the Government of India in 2018. In collaboration with different financial institutions, this scheme offers up to Rs.1 crore. While the loans granted under this scheme takes around 8-12 days for disbursal, applicants can know of their approval within 59 minutes.
- CGTMSE: Among all the government business loan schemes in India, CGTMSE is a crucial one. It offers credit up to Rs.1 crore, though it has the additional advantage of collateral-free loans for amounts going up to Rs.10 lakh.
Private institutions and NBFCs are also not behind when it comes to providing financing to small businesses. Baja Finserv is one such NBFC that offers SME Loans of up to Rs.30 lakh.
They even present pre-approved offers that make availing business loans quick and easy. Pre-approved offers are available on numerous financial products like business loans, home loans, personal loans, etc. You can check your pre-approved offer by providing your name and phone number.
Market growth and access
Previously, public sector companies had to buy 20% of their purchases from SMEs. Under the regulations by the present government, these companies have been directed to purchase 25% of their products from SMEs. Additionally, 3% is reserved for women entrepreneurs.
To understand what is MSME and how it is developing the business sector, knowing this market growth is important.
There are numerous essential technologies that every small business needs to maintain its production and increase revenue generation. Consequently, the government has decided to launch 20 hubs and 100 additional spokes across the country to work as tool sheds for different SMEs. Furthermore, initiatives like the Credit Linked Capital Subsidy Scheme offer up to Rs.15 lakh in credit for technological upgrades.
Social security for employees
Provident fund and insurance for SME employees is another initiative by the government. It aims to secure the employees in this sector financially.
Entrepreneurs should also explore different business ideas in India to find the most suitable option for them. With easy MSME loan scheme options by different financial institutions, effective planning to avail all government aids can especially push business towards success.