.png "Credit score development")
The government of our country has been working to uplift small and medium enterprises for a very long time now. They recognise that this sector contributes to 30% of the GDP of the country and plays an irreplaceable part in providing employment to the citizens of the country. The small enterprises of our country have been overlooked because of the lack of knowledge of their existence and informal nature. Most of the surveys that take place for this sector, end up overlooking these small enterprises. Here is a summary of how much these small businesses contribute
|
Employment generated GDP contribution Exports contribution |
120 million 30% 45% |
The
MSMEs also have smaller units and enterprises which form a part. Most of these
enterprises are informal and do not have a decided annual turnover. In fact,
99% of these enterprises are micro-enterprises. A survey done in 2015-16 stated
that around 62 million enterprises are working with approximately 20 in number.
Amongst them, the majority are one worker units. These enterprises earn an
income which is just enough to survive the business market. This sector thus
has a good revenue for the government.
What is an MSME loan?
MSME is
known as micro, small and medium enterprise loan and can be availed by a
business or an enterprise. This type of loan is generally used by businesses to
borrow capital which can be utilized for buying new machinery, purchasing
inventory etc. A lot of lenders are available to lend these loans.
Some common rates at which the loans are
available are below:
|
Interest Rate |
7.65% p.a. onwards |
|
Loan Amount |
Rs.50,000 onwards |
|
Loan Tenure |
Up to 15 years |
What is the Credit Growth to MSME Sector?
According
to a survey done by SBI, the credit growth to MSMEs has expanded by Rs. 52,800
crores. This is against the degrowth or the decrease that happened during the
same time last year which was for Rs. 61,000 crores.
The
overall growth seems to be up by a whopping 14% and this has been the highest
in the last three years.
Retail
loans have seen an increase of Rs. 1.34 lakh crores. This has also been a sharp
rise as against the degrowth of the same for Rs. 26,500 crores last year.
The data
if classified sector-wise has indicated that the growth has doubled in the last
few years
In the
financial year 2023 it is expected that the credit and the deposits both will
grow in double digits.
A
decline can be seen in the first quarter fortnight for the deposits and credit.
This is assumed to be due to the salary withdrawals in the first month.
MSME Latest Loan Rates
The
latest loan rates and banks providing loans to MSMEs are given below
|
Bank Name |
Interest rate |
|
Allahabad Bank |
At the discretion of the bank |
|
Oriental Bank of Commerce |
10.70% p.a. onwards |
|
Andhra Bank |
At the discretion of the bank |
|
Central Bank of India |
11.25% p.a. onwards |
|
Indian Bank |
9.75% p.a. onwards |
|
Punjab and Sind Bank |
9.95% p.a. onwards |
|
Punjab National Bank |
At the discretion of the bank |
|
State Bank of India |
7.65% p.a. onwards |
|
Syndicate Bank |
At the discretion of the bank |
|
UCO Bank |
8.85% p.a. onwards |
|
Union Bank of India |
At the discretion of the bank |
|
United Bank of India |
10.25% - 16.25% p.a. |
MSME Loan Schemes
The
following loan schemes are available to MSMEs
|
Name of Scheme |
Sub-Schemes |
|
1) MUDRA Loan |
•
Micro-Credit Scheme • Credit
for Micro Finance • Refinance
Scheme for Banks • Mahila
Uddyami Scheme • MUDRA
Card • Equipment
Finance Scheme •
Credit Guarantee Scheme |
|
2) Credit Guarantee Funds Trust for Micro and
Small Enterprises (CGTMSE) |
N/A |
|
3) Prime Minister’s Employment Generation
Programme (PMEGP) |
N/A |
Eligibility for MSME Loan
The
following are the criteria for getting a MSME loan for a business or an
organization
|
Particulars |
Criteria |
|
Type of business |
•
Manufacturing Sector •
Service Sector |
|
Manufacturing Sector |
•
Micro - < Rs.25 lakh • Small
- < Rs.5 crore •
Medium - < Rs.10 crore |
|
Service Sector |
•
Micro - < Rs.10 lakh • Small
- < Rs.2 crore •
Medium - < Rs.5 crore |
Documents Required for MSME Loan
The
following documents may be required for availing the MSME loan
|
Particulars |
Document
Required |
|
Proof of Identity |
PAN card, Aadhaar card, Voter’s ID, passport |
|
Proof of Residence |
Rental agreement, ration card, utility bills |
|
Proof of Business Address |
Rental agreement, lease agreement, utility
bills |
|
Proof of Income |
P&L account and balance sheet of last 2
years |
|
Tax documents |
IT returns, sales tax return, PAN card |
|
Proof of securities provided |
Copies of title deeds/lease deeds offered as
securities |
|
Other documents |
Projected balance sheet, project report, etc. |
MSME Registration
• Click on the link https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm.
• If you have not registered before, click on ‘New
Entrepreneurs or business with EMII
• You have to provide your name and Aadhaar details and click
on ‘Validate and Generate OTP’. An OTP will be sent to your mobile number.
Enter the OTP to authenticate. You will then have to provide the details of
your PAN, and the organization you are a part of and validate it.
• Provide all your personal details and the details of the
industry or plant
•
After entering all the details
on the site, click on ‘Submit and Get OTP’. An OTP will be sent. Enter the OTP
after which you will receive a message for the successful registration.
Conclusion
We can conclude that Credit Score development in the MSME sector has seen a good rise and is expected to maintain the
same graph in the coming years.