Rays Of Hope For MSME

April 1, 2017by yograj rathod0

MSMEs are the best vehicle for inclusive growth of Indian economy, to create local demand and consumption, expanding employment opportunities to locals. MSMEs of today could be MNCs of tomorrow. Realizing this, Central and State governments have taken multiple initiatives to strengthen and enhance the competitiveness of this sector.

So, if you recognize yourself as a part of this sector, this is what you should know government and other ministries have a vision for your growth as an industry.

Recent initiatives by Government bodies are aimed towards encouraging entrepreneurs and empowering MSMEs to overcome hurdles and flourish.
Initiatives such as Make in India, MUDRA and Startup India introduced by the Government will further encourage entrepreneurs and accelerate growth across sectors. These initiatives when integrated with the MSMEs can cement their growth and boost the economy.

Make In India

Make in India is a campaign whose mission is to manufacture products in India and focuses on helping and attracting companies to invest and put up their units of manufacturing in India. It includes the launch of INR 10,000 crores venture capital fund dedicated to MSMEs.

The government has made strategic visits overseas to drive increased investment (including a visit to Japan, where the government has committed to making investments in India of USD 35 billion and to the US where a US-India business body has committed to a USD 42 billion investment in India over the next two to three years)

Benefits to MSMEs:

  • Domestic manufacturing and thus set up of more units creating jobs opportunities
  • More investments means access to finance in the sector
  • Upgradation of technology
  • Quicker ways of project clearance
MSME Schemes

For more details, you can visit Here


Mudra Bank is Micro Units Development Refinance Agency which will act as a regulator of all ‘Micro-Finance Institutions.

The principal product of Mudra Bank will be providing security free financial aid up to Rs.10 lakhs to Last Mile Financiers of the micro businesses/units under the guidance of the Pradhan Mantri MUDRA Yojana but this funding of loan will be based on the stage of growth of the business enterprises. The loan amount will be provided as follows:

  • Shishu: The loan amount under Shishu category would be maximum up to Rs.50,000/-
  • Kishor: The loan amount under Kishor category would be from Rs.50,000/- and up to Rs. 5 lakhs
  • Tarun: The loan amount under Traun category would be from Rs.5 lakhs and up to Rs.10 lakhs

Benefits to MSMEs:

  • Security free financial aid up to 10 lakhs.
  • Increase liquidity and access of funds
  • To be repaid in suitable installments with suitable memorandum periods as per cash flow of the business

How to apply for security free loan from Mudra Banks?

  1. Prepare proposal Business Plan
  2. Categorize according to the loan amount (Shishu, Kishor, Tarun)
  3. Contact the nearest bank falling under PMMY (Pradhan Mantri Mudra Yojana)

List of banks listed under MUDRA can be known from Here

Want to know more about MUDRA scheme? Click Here


Ministry of MSMEs and SIDBI established a trust named CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) on August 30, 2000 (operationalized w.e.f. 1st January 2001) to implement the credit guarantee scheme for Micro and Small Enterprises to strengthen credit delivery system and facilitate flow of credit to the MSME sector. It is operationalized by Government of India and SIDBI.

The main objective is that the fund provider should give importance to project viability and secure the credit facility purely on the primary security of the assets financed. The other objective is that the lender availing guarantee facility should make an effort to give composite credit to the borrowers so that the borrowers obtain both term loan and working capital facilities from a single agency.

Benefits to MSMEs:

  • Loan up to 1 crore to start up/ existing business as Term Loan or Working Capital Loan
  • Eligible to Manufacturing and Service sectors
  • Collateral free loan
  • Loans with less risk as the lender is supported by the scheme in case of default of borrower

How to get a loan under CGTMSE:

  1. Form a Business entity (for start-up)
  2. Prepare Business plan/ Project Report
  3. Submit the business plan or Project Report to banks providing loan
  4. Sanction of loan from bank
  5. Obtain CGTMSE Cover from CGTMSE Organization by paying CGTMSE Guarantee and Service fee

For more details regarding the scheme, you may visit cgtmse.in

A government is constantly doing its best to make the small industries reach up the heights to compete with the global market.

Other initiatives to support MSMEs are:

  • The Securities and Exchange Board of India (SEBI) has issued norms on separate stock exchanges for SMEs (SME platforms) so as to give them more options to raise capital
  • Banks are mandated not to accept collateral security for loans up to 10 lakhs
  • SMERA (SME Ratings Agency), a joint initiative of SIDBI, Dun & Bradstreet and leading banks is a full-service credit rating agency for MSME in India, which will help these enterprises to raise bank loans at competitive rate of interest
  • Credit linked Capital Subsidy Scheme (CLCSS) for Technology up gradation
  • PMEGP (Prime Minister’s Employment Generation Programme)
  • Government has launched Startup India, Stand up India to build a strong ecosystem, for nurturing innovation and Startups in the country
  • Market development Assistance scheme for MSME
  • TUFS (Technology Upgradation Fund Scheme for Textile Industries)
  • IDLSS (Integrated Development of Leather Sector Scheme )
  • TEQUPT(Technology and Quality up gradation support to Micro, Small & Medium Enterprises)
  • FPTUFS – Scheme for Food processing industries
  • TREAD (Trade related Entrepreneurship Assistance and Development)

A government is into drives to encourage this sector as well as support financial lenders so that their risk is diversified and they do not hesitate to be a supportive part of this sector. But somehow, this sector is not able to pull the edge with the potential it has.

MSMEs are still not able to push themselves forward to showcase their potential. To know more, Click Here

For detailed and statistical view of result state wise by measures and steps taken by Government, Visit Here

Scheme wise statistical performance of MSMEs is available Here (up to October 2016)

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