India’s Micro, Small, and Medium-sized Enterprises (MSMEs) industry is a significant contribution to the GDP of the nation. In terms of the nation’s entrepreneurship growth and job creation, MSMEs’ significance in India is clear. MSMEs can be found in every region of India today, from metropolitan to rural and semi-rural areas.
According to statistics published by the India Brand Equity Foundation (IBEF), the loan disbursal for MSMEs stood at Rs. 9.5 Trillion in 2021, which was 40% more than the year 2020. In addition to this, the budget allocation by the Indian government for MSMEs doubled to Rs. 15,700 Crore in 2022.
As MSMEs are emerging as a crucial aspect of the Indian economy, let’s understand what MSMEs are, their features, and their scope in India.
What is Meant by MSME?
To start with, let’s first understand What is MSME? MSME Full Form – MSME stands for Micro, Small, and Medium Enterprises, which are basically small businesses in India. To be considered as an MSME, that small business should have an annual turnover of up to ?5 Crore. The objective of MSMEs in India is primarily to focus on the areas like manufacturing, processing, production, or preservation of goods and commodities.
The Union Ministry of Micro, Small and Medium Enterprises (M/o MSMEs) has issued a Gazette notification to pave the way for the implementation of the upward revision in the definition and criteria of MSMEs in the country. The new definition and criterion came into effect on 1st July 2020, the MSMEs are classified as manufacturing and service-providing enterprises based on investment and annual turnover as mentioned in the below table.
| Size of the Enterprise | Investment | Annual Turnover |
| Micro | Up to Rs.1 Crore | Up to Rs.5 Crore |
| Small | Up to Rs.10 Crore | Up to Rs.50 Crore |
| Medium | Up to Rs.50 Crore | Up to Rs.250 Crore |
Also Read: A Guide To Apply for MSME Loan Online
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Importance and Features of MSMEs
The MSME sector is contributing substantially to the development of the nation. Currently, India has more than 6.3 crore MSMEs. These enterprises are considered the backbone of the Indian economy and a lucrative source of income for small business owners and beginners who wish to venture into the manufacturing or services sector.
Some features of MSMEs include:
- Funding availed through finance and subsidies
- Less capital requirement
- High demand in local and rural markets
- Manpower training
- Job creation
How to Avail of MSME Loans?
Even though MSMEs are thriving in India, some business owners still struggle to find adequate finances for their businesses. To tackle this problem, the government has also launched various schemes and benefits for MSMEs. Besides this, many financial institutions are offering financial products to assist small and medium business owners.
Non-Banking Financial Companies (NBFCs) such as creditsuccess have curated a wide range of offerings for small and medium enterprises. These products include Business Loans for Working Capital, Business Loans for MSMEs, and Business Loans for Proprietorship.
By availing of an MSME loan, business owners can have full control over their finances and can meet long-term and short-term expenses. They can use the funds to infuse working capital, hire staff, expand services, improve product portfolios, and procure advanced machinery and high-quality raw material.
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At creditsuccess, we understand the importance of adequate funding for MSMEs. We offer unsecured Business Loans for MSMEs through our simple online application process. We only require minimal documentation to approve your loan. Our loans are available at competitive interest rates, and flexible loan tenure and are disbursed quickly.
