The Indian government has always been in favor of providing benefits to Micro, small and medium enterprises (MSMEs). There are many advantages of obtaining MSME registration in India, which can be only availed if the business had registered itself as an MSME/SSI under MSME Act. The following are a few advantages or obtaining SSI/MSME registration in India:
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1. Bank Loans (Collateral Free)
The Government of India has made collateral-free credit available to all small and micro business sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme, both the old as well as the new enterprises can claim the benefits. A trust named The Credit Guarantee Trust Fund Scheme was introduced by the GOI(Government Of India), SIDBI(Small Industries Development Bank Of India) and the Ministry of Micro, Small and Medium Enterprise to make sure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprise.
2. Subsidy on Patent Registration
A hefty 50% subsidy is given to the Enterprise that has the certificate of registration granted by MSME. This subsidy can be availed for patent registration by giving application to respective ministry.
3. Overdraft Interest Rate Exemption
Businesses or enterprises registered under MSME can avail a benefit of 1% on the Over Draft as mentioned in a scheme that differs from bank to bank.
4. Industrial Promotion Subsidy Eligibility
Enterprises registered under MSME are also eligible for a subsidy for Industrial Promotion as suggested by the Government.
5. Protection against Payments (Delayed Payments)
At times, the buyers of services or products from the MSME’s or SSIs tend to delay the payment. The Ministry of Micro, Small and Medium Enterprise lend a helping hand to such enterprises by giving them the right to collect interest on the payments that are delayed from the buyer’s side. The settlement of such disputes must be done in minimum time through conciliation and arbitration.
In case, if any MSME registered enterprise supplies any goods or services to a buyer then the buyer is required to make the payment on or before the agreed date of payment or within 15 days from the day they had accepted the goods and services from MSME or SCI registered business( if there is no mention of the date of payment).
If the buyer delays the payment for more than 45 days after accepting the products or services then the buyer has to pay compound interest along with interests (monthly) on the amount that was agreed to be paid. The interest rate is three times the rate that is notified by the Reserve Bank of India.
6. Fewer Electricity Bills
This concession is available to all the Enterprises that have the MSME Registration Certificate by providing an application to the department of the electricity along with the certificate of registration by MSME.
7. ISO Certification Charges Reimbursement
The registered MSME enterprises can claim the reimbursement of the expenses that were spent for the ISO certification.
Conclusion:
MSME’s are rapidly growing with regular support from the government and youths who are inspired and bold enough to start their own venture. Therefore, knowledge about the registration process and its benefits is an absolute must in order to give a boost to the entrepreneurial spirit of MSME & SSI founders.
We hope this article helps all of those who might have had any confusion related to the benefits of MSME registration in India and also to those who are willing to jump into an entrepreneur role or are having a Micro, Small to Medium scale business. Business Escalators are the best when it comes to MSME registration online and in providing all type of Startup, GST, MSME, legal and Accounting Support services too. So contact us and please feel free to mention in the comments section if we have missed any benefits Of MSME registration in India.
Sources:
https://yourstory.com/smbstory/resource-centre-for-msmes-all-you-need-to-know-abo-0jhxtvi3tz
www.scribd.com/document/338838488/Growth-of-Micro-Small-and-Medium-Enterprises-in-Manipur
http://dcmsme.gov.in/schemes/sccrguarn.htm
https://www.quora.com/What-are-credit-guarantee-fund-trust-schemes-for-MSMEs
https://www.quora.com/What-is-MSME-and-what-are-the-benefits-of-MSME-registration
http://pib.nic.in/newsite/PrintRelease.aspx?relid=137646
https://www.cgtmse.in/chairman_message.aspx
Author Bio
How I claim ISO Certification Charges under MSME? Please suggest
Sir, our MSME reg No. UDYAM-JH-06-0001341
can we avail benefit for exemption of Security Deposit / EMD in Govt Tenders
I’m a Scrap dealer, deals in plastic paper wood glass and iron scrap. Should i register my self for msme
Protection against delayed payment is available only for micro and small enterprises. Medium enterprise is not covered as the definition of Supplier, Section 2(n) covers only micro and small enterprises.
Please let me know if your thoughts differ….
I read your article and i want to know how can i get overdraft facility with my bank collateral free is this possible?
Any hospital can apply for this MSME registration and yes then all the benefits remain same as mentioned?
Thanks for this useful information.
Hi!
Just read your article, very informative indeed.
I did however have a few more questions.
1. Is this for new companies/firms only or already functioning small businesses can avail this service too? I am a part of my trade for quite a few years now.
2. About help with delayed payments, can we use this service for payments delayed after the MSME registration only or can it be used for older delayed payments too?
Thanks and Regards.
can we get reduction of rate of interest on Doctor plus loan availed earlier after registration under MSME ?
What are liabilities if we register under MSME?
I am small msme unit in delhi we buy thr raw material from Steel Authority of India can i get some benefit
I read your article online and would like to know the procedure to get a rate cut on interest rates for a loan and subsidy on electricity bills as mentioned. I have a Manufacture plant Premix registered under MSME Udyog Adhaar no: MH23A0031354 . Loan from DCB BANK for a 15 year term at 10.45% interest rate for the same. Kindly guide me for the same.
We have a manufacturing unit of footwear and registered under Gst portal and doing the footwear business across the india.
I just want to know that is there any benefit can be provided by the central gov’t to the small business units?
Dear Sir,
we are manufacturing of ms iron parts of various items from the year of 2003.but did not have any government help wide order or finence. so please gide our ways for the good of us. we want to be the part of MSME family for our support
I have not yet registered my society anywhere in the registering authority.
So, can I applied for MSME
Can a proprietorship firm get registered under MSME. what is the procedure for the same and how can that proprietorship firm can take benefits out of it
PLASE SEAR MSME CERTIFACET BENIFATE
Are traders eligible for registration under MSME or is it available only for manufacturers and service providers?
I read your article online and would like to know the procedure to get a rate cut on interest rates for a loan and subsidy on electricity bills as mentioned. I have a dental clinic in Pune registered under MSME Udyog Adhaar no: MH26E0024504 on 27/7/17. I have opted for a Doctors Loan from Bank of Maharashtra for a 12 year term at 9.45% interest rate for the same. Kindly guide me for the same.