As per the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 enacted by the Government of India, the definition of an MSME encompasses Micro, Small and Medium Enterprises which are further classified into two broad categories.
Companies in the Manufacturing Sector
Enterprises involved in the manufacturing or production of goods for an industry listed in the first schedule of the Industries (Development and Regulation) Act, 1951 are included within the scope of MSME meaning.
Also, enterprises employing plant & machinery to add value to a finished product that results in a distinct name, use or character, come within the purview of micro small and medium enterprises meaning.
Based on their annual turnover, enterprises are classified under the following sub-categories.
|Companies with investment not more than Rs. 1 crore and turnover up to Rs. 5 crore.||Companies with investment up to Rs. 10 crore and turnover not more than Rs. 50 crore.||Companies with investment not more than Rs. 50 crore and turnover not more than Rs. 250 crore.|
Companies in the Service Sector
The MSME full form also extends to enterprises in the service sector. The sub-categorisation of companies in the service sector based on their annual turnover is as follows.
|Companies with investment up to Rs. 1 crore and annual turnover not more than Rs. 5 crore.||Companies with Rs. 10 crore investment and turnover up to Rs. 50 crore.||Companies with investment of up to Rs. 50 crore and turnover ranging between Rs. 50 crore and Rs. 250 crore.|
In order to boost businesses, the government has recently revised the criteria of classification of MSMEs under the MSMED Act 2006 which came into effect from July 1, 2020.
The new classification of what is MSME will have the following categorisations based on its annual turnover and investment in plant/machinery/ equipment irrespective of whether they belong to the manufacturing or the service sector.
|Firms with investment not exceeding Rs. 1 crore and turnover up to Rs. 5 crore||Companies with investment of not more than Rs. 10 crore and turnover between Rs. 5 core and Rs. 50 crore||Enterprise with a turnover of Rs. 250 crore and investment of Rs. 50 crore.|
With this information about MSME, eligible companies can seek funding for business growth and expansion. High-value funding options like MSME Loans from Bajaj Finserv are available with simple eligibility criteria for MSME Loan and minimum documentation.
Fulfil business requirements like infrastructure improvement, working capital infusion, plant & machinery installation and many more with an MSME Loan of up to Rs.45 lakh.
MSME stands for Micro, Small and Medium Enterprise. It was introduced by the Government of India in agreement with the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. As per this act, MSMEs are the enterprises involved in the production, processing or preservation of goods and commodities. Vital for economic growth, this sector contributes around one-third of the country’s GDP and generates employment for around 110 million of the population.
It also plays an important role in the socio-economic development of the country as many of these enterprises operate in rural India. According to the Government's annual report of 2018-2019, more than 6 lakh MSMEs operate in the country.
Initially, MSMEs were classified based on two factors - investment in plant/machinery and an annual turnover of the enterprises. However, the Ministry of Micro, Small and Medium Enterprises has recently revised the classification by combining these two factors into a single criterion.
The MUDRA loan is provided under the Pradhan Mantri MUDRA Yojana (PMMY) to non-farming and non-corporate micro and small enterprises. These enterprises can avail loans up to Rs.10 lakh under the MUDRA (Micro Units Development & Refinance Agency Ltd.) scheme.
We have discontinued this product (MUDRA Loan) at this time. Please reach out to us on +91-8698010101 to know more about the current financial services provided by us.
|Loan amount under Shishu||Up to Rs.50,000|
|Loan amount under Tarun||Rs.50,001 to Rs.500,000|
|Loan amount under Kishore||Rs.500,001 to Rs.10,00,000|
|Processing fees||0.5% for Tarun Loan, nil for others|
|Eligibility criteria||New and Existing Units|
|Repayment period||3-5 Years|
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