Benefits of Getting an MSME Business Registration that StartUps Should Not Miss On

MSME full form stands for Micro, Small and Medium Enterprises; and the registration procedure is a government initiative to ensure varied assistance to such businesses. While financial assistance in the form of business loan is already offered by many financial institutions under PMMY schemes, this registration ensures not just financial but tertiary benefits too.

Among financial assistance related schemes by government, the MUDRA Yojana along with other schemes offer a varied range of monetary assistance from Rs. 50,000 to Rs. 1 Crore. Of the benefits, a broad division would be of financial and non-monetary benefits. The underneath broadly sums up the financial helps and benefits of registration.

• Priority lending: Under directives from the Reserve Bank of India, financial institutions offer advances to MSMEs for short or long term financing. With registration, business ventures get higher priority while applying for such loan schemes.

• Lesser interest rates and higher credits: MSME registration allows lenders to identify credible businesses, lowering the risk associated with lending funds. Lenders can offer larger sum of credit at a lower rate of interest, which helps with timely repayments. 

• Credit linked guarantee scheme: In with SIDBI, under CGTMSE, the financial assistance for the MSMEs can go up to Rs. 1 Crore depending on the creditworthiness of a particular borrower.

The following are the noteworthy ones amongst non-financial benefits which are immensely helpful for MSMEs.

• Market assistance from the government and export promotion: The registration procedure ensures other aids like market assistance and export promotion along with the SME and MSME friendly budget 2019-20 brings cheer for small and medium enterprises. Government organised expos ensure market assistance while incentives like tax exemptions and subsidies ensure promotion of export.

• Capital and tertiary grants for infrastructural upgrade: Government gives capital grants for infrastructural developments as well as technical grants to MSMEs, as it is a sector that greatly influences the employment ratio of the country. With 11.10 Crore employment in MSMEs generating 29% of the country’s GDP; the government hopes to extend it to 15 Crore contributing to 50% of the country’s GDP. Technical grants primarily include different training as well as entrepreneurial development. However, these capital grants do not come under PMMY and CGTMSE.

• Reimbursement of ISO certificate – ISO 9000, ISO 14001 and HACCP certifications ensure quality as well as credibility for all business across India. Under the registration scheme, government assures exemption of certification charges for all MSMEs in order to raise their performance and standards.

• Exclusive purchases and sheltering from competition – The Government of India introduced MSME Market Development Assistance scheme which follows a price and purchase preference policy. Under this, 358 different items produced by MSMEs are listed for exclusive purchase by the Central Government.

• Technology and quality upgrade support – While there are several essential technology that every small business needs, the government reimburses registered MSMEs for implementation of clean energy along with audit reports and subsidies for adhering to international standards.

The government has brought an overall approach in developing the MSME business sector of India. Like in MSME full form, varied businesses from micro to medium with all in between are reaping the benefits of registration; an opportunity for easy upgrade, development and expansion.