Benefits of Registering under MSME

By AuthorInsights

Registering under the Micro, Small, and Medium Enterprises (MSME) category in India offers several benefits to businesses, particularly smaller enterprises.

Here are some key advantages:

  1. Access to Credit Facilities:
    Priority Sector Lending: Banks are mandated to lend a certain percentage of their total advances to the priority sector, which includes MSMEs. This makes it easier for registered MSMEs to access credit.
    Collateral-free Loans: Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, MSMEs can avail collateral-free loans up to a certain limit, facilitating easier access to credit.
  2. Financial Support and Subsidies:
    Interest Rate Subsidy: MSMEs may be eligible for interest rate subsidies on loans under various government schemes.
    Preference in Government Tenders: Many government tenders are reserved for MSMEs, giving them preferential treatment in procurement processes.
  3. Protection Against Delayed Payments:
    Delayed Payment Protection: The MSME Development Act, 2006, provides for the protection of MSMEs against delayed payments from buyers. In case of delayed payment, the buyer is liable to pay compound interest to the supplier.
  4. Marketing Assistance:
    Promotion and Development of Markets: The government and various agencies provide support for the promotion and development of markets for MSME products through exhibitions, trade fairs, and other marketing events.
  5. Technology Upgradation and Quality Certification:
    Assistance for Technology Upgradation: MSMEs can avail financial support and subsidies for implementing technology upgrades.
    Reimbursement of Quality Certification Expenses: MSMEs can get reimbursement of expenses incurred for obtaining product quality certifications.
  6. Ease of Compliance:
    Simplification of Laws: MSMEs benefit from simplified laws and regulations, making compliance easier and more cost-effective.
    Exemption from Certain Regulations: MSMEs are exempt from certain regulations applicable to larger businesses, reducing compliance burden.
  7. Skill Development and Training:
    Training Programs: MSMEs can access various skill development and training programs conducted by the government and other agencies to enhance their workforce’s skills.

Conclusion:

Registering under the MSME category can provide small and medium-sized enterprises with a range of benefits that can help them grow and succeed in a competitive business environment. From easier access to credit and financial support to marketing assistance and ease of compliance, the MSME registration offers a valuable support system for businesses looking to thrive and expand.