The MSME sector is regarded as the backbone of the Indian economy which has made a significant contribution to the nation’s socio-economic growth. It creates job opportunities and serves the backward and rural growth. According to the 2018-19 annual report from the Government, there are currently 6,08,41,245 MSMEs in India.
The Ministry of Micro, Small, and Medium Enterprises, a division of the Government of India, is the administrative executive body for the drafting and administration of Indian micro, small and medium-sized enterprises rules and regulations.
In October 1999 the Ministry of Small-Scale Industries and Agri-Rural Industries was established. The ministry was divided into the Ministry of Small Scale Industries, and the Ministry of Agro and Rural Industries in September 2001. The President of India amended the Rules of the Government of India 1961, pursuant to a notification dated 9 May 2007. They were combined into a single Ministry pursuant to this provision.
The ministry has been charged with supporting micro and small enterprises. The Ministry managed the Small Industries Development Department, as was the public sector undertaking of the National Small Industries Corporation Limited).
Ministry of MSME functions
- Works for the well-being of craftsmen and workers
- Provides the business with credit cap or funding assistance
- Promotes the growth of entrepreneurs and skills enhancement through specialized training institutions
- Supports updating technology, infrastructure growth, and modernization
- Provides aid to improve exposure to domestic and export markets
- Offers new research facilities and quality certification
- Endorses packaging, product creation, and design intervention
What is an MSME loan
MSME loans are unsecured loans that many financial institutions are providing to cover various business-related costs on credit. These loans come with clear eligibility requirements that the borrower must meet. The Indian Government and RBI describe MSME loans as funds to help businesses in terms of financing, infrastructure, and other areas.
These loans are also provided by financial institutions under several government schemes such as
- Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE)
- Prime Minister’s Employment Generation Programme (PMEGP)
- Micro Unit Development and Refinance Agency (MUDRA Loan)
In order to maximize the benefits offered by an MSME loan, companies must meet particular eligibility requirements listed in the schemes. Such loans come with a variable tenor, which makes such loans reasonably affordable.