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.
According to the revised classification effective since July 2020, MSMEs are categorised as follows:
As per the new categorisation of MSMEs, three changes are now made–
The new threshold brings many smaller companies in the ambit of MSME classification. A turnover-based classification also increases transparency in a company’s identification as an MSME as the government can refer to the available GST data for turnover verification requirements.
One of the fastest-growing sectors, MSMEs require funds to meet their various working capital needs like staff salaries, purchase of raw materials, new machinery and equipment, etc. Leading financial institutions like Bajaj Finserv offer tailored financial credit facilities that suit the needs of MSMEs. To know more, read the MSME loan details given below.
MSME loans are unsecured loans offered by several financial institutions to meet various business related expenses on credit. Such loans come with specific eligibility criteria which the applicant needs to meet. MSME loans are defined by the Indian Government and RBI as loans for business enterprises for support in terms of finance, infrastructure and other areas.
Financial institutions also offer these loans under several government schemes like –
Businesses must meet specific eligibility criteria mentioned under the schemes to enjoy the benefits extended by an MSME loan.
After what is MSME loan, also know that loans for MSMEs (Micro, Small and Medium Enterprises) come with variable tenor, making these advances conveniently affordable.
Bajaj Finserv offers a composite MSME loan limit of up to Rs. 45 Lakh to help enterprises meet their immediate funding requirements. It comes with minimum eligibility criteria and documentation requirements to simplify the process of availing msme funding.
To help MSMEs access funds in a hassle-free way, Bajaj Finserv offers low interest rates on MSME loans with benefits such as a Flexi loan facility and more.
The loan can be repaid in easy EMIs over the tenor. With Bajaj Finserv, businesses can also opt to part-prepay or foreclose the loan account before the tenor ends at nominal charges. This borrower-friendly feature helps repay the loans affordably.
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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