Existing Schemes

For further details on below queries, you may please visit www.dcmsme.gov.in

Bank Finance and Credit Support

A. Prime Minister's Employment Generation Programme (PMEGP)

Eligibility & Conditions:

  • Target Beneficiary: Unemployed rural and urban youth;
  • Eligibility Criteria: Any individual above 18 years of age, SHGs, Charitable trusts, Registered Societies etc.
  • Budget for FY 20-21: Rs. 2500 Crores
  • Details of scheme: It is a Bank appraised and financed, subsidy program to set up micro-enterprises. Hence, a Project Report will be required;
  • Allowed Project Cost: for Manufacturing Unit: Rs. 25 lakh; Service Sector Unit: Rs. 10 lakh, Trading SectorUnit Rs. 10 lakh in North Eastern Region, LWE-affected districts and Andaman & Nicobar Islands
  • Subsidy: General Category: 15% of the project cost in urban areas, 25% in rural areas;
  • Subsidy for Special Category(SC/ST/OBC/ Minorities/Women/ NER/Hill Areas): 25% in urban, 35% in rural areas
  • Contribution of the Entrepreneur: General: 10 %, Special category: 5 %.

Assistance for upgradation and expansion of successful/well performing existing units:

  • The maximum cost of the project under manufacturing sector for up-gradation is Rs.1.00 crore and Rs.25.00 lakh under Service/Trading sector;
  • Maximum subsidy would be 15% of the project cost (20% for NER and Hill States). The balance amount of the total project cost is provided by Banks as term loan.

Steps to Take:

  • It is a fully on line scheme The applicant can apply on line only;
  • The applicant should apply in the following Website- https://www.kviconline.gov.in/pmegpeportal
  • The applicant to follow the guidelines of this portal.
  • In case of help required, the applicant may contact nearest office of Khadi and Village Industries Commission (KVIC), District Industries Center (DIC), State Khadi and Village Industries Board (KVIB) or Coir Board;
  • The applicant has the option to choose Implementing Agency from KVIC/KVIB/DIC/Coir Board. These agencies will support in checking the documents and help in project DPR preparation;
  • Implementing Agencies may suggest some corrections before forwarding the proposal to the Bank;
  • Since it is a bank financed scheme, based on the strength of the project, Bank decides about the loan and the loan amount to the applicant. Hence, the applicant should prepare a good and sustainable business plan;
  • On sanction of loan, Bank will inform the applicant and also to the concerned Implementing Agency;
  • Implementing Agency will arrange for the Entrepreneurship Development Programme (EDP) Training for the applicant, which is available on line as well;
  • On EDP completion, a certificate is issued to the applicant and same is to be submitted along with applicant contribution to the concerned Bank to get first instalment of the loan

B. 'Credit Guarantee Fund Scheme for Micro and Small Enterprises' (CGTMSE)

Eligibility & Conditions:

Existing Micro, small and service Entrepreneurs & Aspiring Entrepreneur all are eligible

Nature of Scheme:

  • The scheme is implemented by Credit Guarantee Trust for MSE (CGTMSE)
  • Credit guarantee for loans upto Rs. 2.00 crore, without collateral and third party guarantee
  • Guarantee coverage ranges from 85% (Micro Enterprise up to Rs 5 lakh) to 75% (others)
  • Recently, guarantee coverage made eligible to select NBFCs and Small Finance banks
  • The extent of guarantee cover is 50% of the sanctioned amount of the credit facility for credit from Rs. 10 lakh to Rs. 100 lakhs per MSE borrower for retail trade activity.
  • The extent of guarantee cover is 80% for (i) Micro and Small Enterprises operated and/or owned by women; and (ii) all credits/loans in the North East Region (NER) for credit facilities upto Rs. 50 lakh.
  • In case of default, CGTMSE settles the claim with the lending institutions.

Steps for Availing the Assistance:

  • Apply through Member Lending Institutions (MLIs- Banks and NBFCs).
  • List of MLIs are available at www.cgtmse.in

FAQ's

1. What is the Credit Guarantee Scheme for MSEs (CGTMSE)? And What is the support available for collateral free borrowing

The Ministry of MSME, Government of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to the MSE sector without the need for collaterals / third party guarantees.

The main objective of the scheme is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed. The Credit Guarantee scheme (CGS) seeks to reassure the lender that, in the event of a MSE unit, which availed collateral - free credit facilities, failing to discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the lender up to 85 per cent of the outstanding amount in default.

The CGTMSE would provide cover for credit facility up to Rs. 200 lakh which have been extended by lending institutions without any collateral security and /or third-party guarantees. A guarantee and annual service fee is charged by the CGTMSE to avail of the guarantee cover.

Revised Scheme: Financial assistance on already existing schemes Upto 20% of entire Outstanding credit as on 29.2.2020 for Units upto Rs. 100 cr. turnover eligible. No guarantee fee, no fresh collateral.

For more details you may visit www.cgtmse.in

2. Who can apply for assistance under this scheme?

Any MSME registered unit in Manufacturing or Service sector can apply for assistance under this scheme.

3. Whether borrowers from all service sector enterprises are eligible under the Scheme?

As of now, all activities that come under service sector as per MSMED Act, 2006 except retail trade are eligible for coverage under the scheme.

4. Which type of borrowers can be covered under the Scheme?

New and existing Micro and Small Enterprises engaged in manufacturing or service activity excluding Retail Trade, Educational Institutions, Agriculture, Self Help Groups (SHGs), Training Institutions etc.

5. Which are considered as eligible lending institutions under the scheme?

All Scheduled Commercial Banks (either PSU, Private or Foreign Banks), selected Regional Rural Banks, selected state financial corporations or such of those institutions as may be directed by GOI can avail of guarantee cover in respect of their eligible credit facilities under the Scheme.

Small Industries Development Bank of India (SIDBI), National Small Industries Corporation Ltd. (NSIC) and North Eastern Development Finance Corporation Ltd. (NEDFi) have been included as eligible institutions.

6. What is quantum of credit facility that can be covered under the Scheme?

Fund and non-fund based (Letters of Credit, Bank Guarantee etc.) credit facilities up to Rs. 100 lakh per eligible borrower are covered under the guarantee scheme provided they are extended purely on the project viability without collateral security or third party guarantee.

7. Can a Private sector bank or a foreign bank be eligible for guarantee cover?

Yes, provided it is a commercial bank listed in the II Schedule to the Reserve Bank of India Act, 1934.

8. Is Regional Rural Bank eligible for guarantee cover?

Yes, fulfilling the criteria of circular dated June 10, 2014 on "Review of Interest cap and other registration criteria of Regional Rural Banks (RRBs) as Member Lending Institutions (MLIs) of CGTMSE".

The Trust shall cover credit facilities (Fund based and/or Non fund based) extended by select RRB(s) to a single eligible borrower in the Micro and Small Enterprises sector for credit facility not exceeding 50 lakh by way of term loan and/or working capital facilities on or after entering into an agreement with the Trust, without any collateral security and/or third party guarantees.

9. Is guarantee benefit available to existing units of a lending institution which has become a MLI of CGTMSE?

In case of existing units, additional credit facilities in the form of term loan or renewal of working capital facilities can be covered as and when the facilities are extended, provided no collateral security and/ or third party guarantee is obtained.

Part of the credit facility with collateral and part of the facility without collateral for guarantee cover would not be entertained if it is considered as a composite credit.

10. Is it possible to cover credit facilities, which have already become NPA?

No, the credit facility that has already become NPA cannot be covered under the Scheme.

11. What would be the guarantee / service fee that would be payable by the member-lending institution on credit facility sanctioned in excess of 200 lakh?

Presently, annual guarantee fee is payable @1% (0.75% or 0.85% in case of Women, Micro and units in North Eastern Region including state of Sikkim) on the credit facility agreed to be covered by the Trust.

In this case, maximum of 200 lakh would be extended guarantee cover even though the sanctioned amount exceeds 200 lakh.

12. Can a credit facility extended to a borrower against a collateral security be covered under the Guarantee Scheme, if the lending institution relinquishes its rights on the collateral security?

Yes, provided the lending institution relinquishes its rights on the collateral assets and releases the same in favour of the borrower before seeking guarantee cover and subject to fulfilment of the other norms of the Scheme.

Further, in case the MLIs has to retain the collateral security for the existing credit facility, a new credit facility extended to same borrower, without taking collateral can be covered under the scheme provided, the MLI is not extending the charge on the existing collateral to new facility.

13. Can term loan or working capital facility alone be extended by an eligible lender and still be covered under the guarantee scheme?

Yes, a lender can extend either term loan or working capital facility alone and still be eligible for a guarantee cover if it meets the other eligibility parameters.

Needless to say, the credit facility extended to a borrower should be without any collateral security and/or third party guarantee.

14. Is there any ceiling in respect of interest to be levied on the credit facility advanced to the borrower if the same is to be covered under the Scheme?

Any credit facility which has been sanctioned by the lending institution on or after September 01, 2015 with interest rate more than 2% and 3% over the Base Rate/ (Average Base rate decided by the Trust from time to time as applicable to RRBs) for loans up to 50 lakh and loans above 50 lakh respectively.

However, in case of those MLIs for whom Reserve Bank of India has not enjoined Base Rate concept, the existing provision of CGS will continue.

15. When will the guarantee cover commence for the eligible credit facility?

The guarantee cover will commence from the date on which guarantee fee proceeds are credited to bank account of the Trust.

16. Does CGTMSE have branch offices in other cities in India?

CGTMSE has its Registered Office at Mumbai and does not have any branches. Since the entire operations are online, CGTMSE is able to cater to the needs of its MLIs from Mumbai.

17. How is this guarantee scheme operated by the Trust?

The operations of this Scheme are fully computerized using B2B e-business concept to enable the Trust to deliver prompt service to the lenders.

18. How long the guarantee cover is available for credit facilities extended to a particular borrower?

Guarantee will commence from guarantee start date and shall run through the agreed tenure of the term loan / composite loans. Where working capital facilities alone are extended to eligible borrowers, it would be for a period of 5 years or block of 5 years on renewal of the guarantee cover, provided MLI pays the Annual Service Fee due as on March 31, latest by within 60 days from the date of demand by CGTMSE.

19. What is the tenure of the cover for credit relating to working capital?

The tenure for coverage of working capital facilities is 5 years, where working capital alone is covered under the scheme. In case term credit and working capital both are covered under the scheme, the tenure relating to working capital facility would match the normal repayment period of term credit.

The reason for keeping a limit of 5 years wherever working capital alone are covered are that the period for which the same are extended by the lending institutions are not time bound.

The same are reviewed periodically for increase/ decrease in the limit sanctioned, and are expected to continue for a time frame much longer than 5 years. CGTMSE welcomes any renewal of guarantee cover beyond 5 years on a payment of applicable guarantee fee.

20. Can the Micro and Small Entrepreneurs / borrowers approach the Trust directly to seek guarantee for the credits sanctioned by the Banks?

Entrepreneurs in the Micro and Small Enterprises sector have to approach the Banks or financial institutions (who have already registered with the Trust as MLIs) with their viable proposals for their credit requirements. The List of MLIs of the Trust can be seen at CGTMSE's web-site at http://www.cgtmse.in or www.cgtsi.org.in

21. What information is required to be submitted to the Trust before starting operations under the Scheme?

The lending institution has to submit an undertaking (download from http://www.cgtmse.in/files/Undertaking.pdf) on a stamp paper of appropriate value to the registered office of the Trust. Subsequently, MLIs are required to give the names and addresses of the Zonal / Regional / Branch offices through which they would like to operate the Scheme.

They are also required to furnish the names of a nodal officer and two other officers who will be operating the Scheme at each of the operating offices. On receipt of this information, Member ID and Passwords would be allotted by the Trust, after which it would be possible for MLIs to lodge applications for guarantee cover. Applications are required to be lodged online.

C. Interest Equalization/ Subvention Scheme

Objective: Credit support

Key Benefits: 2% interest subvention for incremental credit to MSMEs.

Scheme applicable for

Existing Entrepreneurs & Aspiring Entrepreneurs

Detailed Information

  • Interest Subvention Scheme for Incremental credit to MSMEs 2018 offers 2 % interest subvention on fresh or incremental loans maximum up to Rs. 1 crore to MSMEs. Small Industries Development Bank of India (SIDBI) is the Nodal Agency for implementation of the Scheme.
  • The Scheme aims at encouraging both manufacturing and service enterprises (including trading activities) to increase their productivity. Incremental/fresh term loan or incremental/fresh working capital extended from 2nd November 2018 by any Scheduled Commercial Banks, NBFCs, RRBs, UCBs (Scheduled & Non-scheduled) and DCCBs would be covered under the scheme.
  • MSMEs already availing interest subvention under any of the Schemes of the State / Central Govt. are not eligible under the Scheme.

How to apply : SIDBI is the Nodal Agency. Implemented through Member Lending Institutions. To know more please go through the SIDBI's circular dated April 4, 2019 on 2% interest subvention

FAQ's

1. What is Interest Equalisation/ Subvention Scheme?

The Government has introduced Interest Subvention Scheme for Incremental credit to MSMEs 2018 offers 2 % interest subvention on fresh or incremental loans maximum up to Rs. 1 crore to MSMEs

D. Credit Link Capital Subsidy Scheme for Technology Upgradation

Objective : Technology support/ Credit Support

Key Benefits :

  • Induction of established and improved technologies.
  • 15% Subsidy on institutional credit upto Rs 1.00 crore with a subsidy cap of Rs.15.00 lakh.

Scheme applicable for

Existing Entrepreneurs & Aspiring Entrepreneurs

Detailed Information

The objective of CLCS component of CLC-TUS is to facilitate technology to MSEs through institutional finance for induction well established and proven technologies in the specific sub-sector/products approved under the scheme:

  • Upfront subsidy of 15% on institutional credit up to Rs. 1.0 crore (i.e. a subsidy cap of Rs. 15.00 lakh) for identified sectors/subsectors/ technologies.
  • Flexibility for review of the identified technologies/ subsectors also exists.
  • Presently scheme is being implemented through 11 nodal banks/agencies, however, almost all Commercial Banks, Pvt. Banks & RRBs are acting as PLI through these 11 nodal banks/agencies {SIDBI, NABARD, SBI, Andhra Bank, PNB, BoB, Canara Bank, Corporation Bank, Indian Bank, Bank of India, & TIICL}.
  • In order to ensure fair inclusion of SC/ST category, women entrepreneurs and entrepreneurs from NER, Hill States (Jammu & Kashmir, Himachal Pradesh & Uttarakhand) Island Territories (Andaman & Nicobar and Lakshadweep) and the identifies Aspirational Districts/LWE Districts, the subsidy has also been proposed to be admissible also for investment in acquisition/replacement of plant & machinery/equipment & technology up-gradation of any kind.

How to apply : As per Scheme guidelines - Through Prime lending Institution / Nodal Banks. To know more please visit: https://clcss.dcmsme.gov.in/

FAQs

1. What is the support available for technology upgradation?

Ministry implements a scheme called Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation of Micro and Small enterprises in the country. Under the scheme, 15 per cent capital subsidy, limited to maximum of Rs 15 lakh (12 per cent prior to 29.09.2005 limited to maximum of Rs 4.8 lakh) is provided to the eligible MSEs for upgrading their technology with the well-established and improved technology as approved under the scheme.

48 products/sub-sectors have been approved under the CLCSS till date. If you are an MSE manufacturing a product and want to upgrade the technology of manufacturing the product with the well-established and improved technology as approved under the Scheme, then you may have to approach to the nodal agencies/eligible financial institution for sanction of term loan for purchase of eligible machinery. For further details please visit www.dcmsme.gov.in.

2. What is CLCSS?

It is Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation / purchase of new machine of Micro and Small enterprises in the country.

3. Whether the CLCSS is in operation at present?

Yes. The scheme is continued w.e.f.01.04.2017 and implemented as per pre-revised guidelines, the revised guidelines will be effective from 13.08.2019 and its amendments from time to time, the present validity of the CLCS Component of CLCSTU scheme is extended up to 31st March 2020. For more details please visit on the URL: http://dcmsme.gov.in/CLCS-TUS-Revised-Guidelines.pdf

4. When CLCSS was launched?

The Scheme was launched in the financial year 2000-2001.

5. What were the salient features of the CLCSS?

Under the scheme, 15 per cent capital subsidy, limited to maximum of Rs 15 lakh is provided to the Micro and Small Enterprises for upgrading their technology with the well-established and improved technology as approved under the scheme.

6. How many products/sub-sectors have been approved under the CLCSS?

51 products / sub-sectors have been approved under the CLCSS till date. List is available in the Scheme guidelines at www.dcmsme.gov.in

7. Whether the Scheme is restricted to 51 sub-sectors only?

Technologies / new sub-sectors / products can be added as per the need / proposal received from industrial associations/units in the prescribed format (available on the website) after approval of Technical Sub-Committee (TSC) and Governing and Technical Approval Board (GTAB).

8. Whether the Scheme is applicable for new MSEs?

Yes.

9. How can I get benefit under the Scheme?

If you are an MSE manufacturing a product and want to upgrade the technology of manufacturing the product with the well-established and improved technology as approved under the Scheme, the unit can approach to the nodal Banks/Agencies /Eligible financial institution for sanction of term loan for purchase of eligible machinery.

The financial institutions /nodal banks/agency will sanction & recommend the subsidy eligible applicant to this office. To know more about this scheme, please follow the link http://dcmsme.gov.in/CLCS-TUS-Revised-Guidelines.pdf

10. Which are the Nodal Agencies for implementation of CLCSS?

Small Industries Development Bank of India (SIDBI), National Bank for Agriculture and Rural Development (NABARD), Canara Bank, Bank of Baroda, Bank of India, The Tamilnadu Industrial Investment Corporation Limited, Chennai (TIICL), Andhra Bank, State Bank of India, Punjab National Bank, Corporation Bank and Indian Bank are the nodal Bank/Agencies for implementation of the CLCSS. Contact details for Nodal Banks/Agencies are available on the official website of this office link i.e. http://www.dcmsme.gov.in/schemes/Faqs.pdf

11. Why all the banks are not covered under the Scheme?

All Scheduled Commercial Banks are covered under the scheme either as nodal bank or as PLI to SIDBI or NABARD.

12. Is CLCSS applicable for medium and large-scale Enterprises?

No, till date only Micro and Small-Scale Enterprises (MSEs) (existing & new) are eligible under CLCSS.

13. What are new steps will have been taken by the Ministry for effective implementation of CLCSS?

Management Information System (MIS) is being developed for online submission of application.

14. Is there any web-site where from I can get more details of the CLCSS?

Yes. Web-site is www.dcmsme.gov.in under the tab 'Technology Upgradation'.

15. Whether individual MSEs can directly apply for subsidy?

No, this scheme is applicable to those units who have availed term loan from banks to acquire upgraded technology/machines. Units cannot apply directly online but banks will forward the application to Office of Development Commissioner (MSME).

16. What is the time limit for applying for subsidy?

Eligible claim with reference date (date of release of last instalment of term loan) of each quarter should reach up to the end of next quarter. For example, if reference date falling between 1st January, 2015 to 31st March, 2015 the claim should be forwarded latest by 30th June, 2015 to Office of DC (MSME).

17. What is the mechanism for disbursement of subsidy to the unit?

Subsidy is being released to the concerned Nodal bank/agency and subsidy is to be kept in the form of Term Deposit Receipt (TDR) for 3 years by bank after release by Office of DC (MSME) in the concerned unit account and interest amount on the term loan should be reduced accordingly.

The beneficiary unit shall remain in commercial production for a period of at least three years after installation of eligible plant & machinery on which subsidy under CLCSS has been availed. If the unit fulfils the condition, the TDR will be transferred to unit's account after three years. Further, it is to clarify that there are two different conditions one is about the commercial production for a period of at least three years after installation of the eligible plant machinery on which subsidy under CLCSS has been availed and another is that Subsidy is to be kept in the form of TDR for 3 years.

These two conditions and other conditions stipulated in the extant guidelines are to be fulfilled by the beneficiary/PLIs before release of subsidy in the beneficiary's

Marketing Support (Exhibition Participation Schemes)

A. Procurement and Marketing Support (PMS) scheme

Objective : Marketing Support

Key Benefits

  • Participation of Individual MSEs in domestic Trade Fair/ Exhibition
  • Capacity building of MSMEs in Modern Packaging Technique / Development of Marketing Haats.
  • Organizing Domestic Trade Fair & Exhibition/ Vendor Development Programs/ National & International Workshops & Seminars/ Awareness programs

Scheme applicable for

  • Existing Entrepreneurs

Detailed Information

  • Participation of individual MSEs in domestic trade fairs/ exhibitions across the country: Maximum Budgetary support (space rent and contingency) up to Rs.1.5 Lakhs max. for Metro & A class citers. Rs 1.0 lakhs max. for Class B cities / NER/J&K/ Hilly States and for other cities Rs.0.80 lakhs max.
  • Organizing Domestic Trade Fairs/ Exhibition and participation in trade fairs/exhibitions by the Ministry/Office of DC (MSME)/Government organizations:
  • Maximum Budgetary support for space rent and advt. & publicity for the event is as follows,
  • a. Regional: (State/District): Rs.30.00 Lakh max.
    b. National: Rs.40.00 Lakh .max.
    c. International: As decided by Empowered Committee subject to approval of Deptt. Of Expenditure.
  • Capacity building of MSMEs in modern packaging technique: Maximum Budgetary support of Rs.1.0 lakh max. for ordinary packaging consultancy and Rs.1.5 lakh max. for green packaging consultancy for MSME unit.
  • Development of Marketing Haats. Maximum Budgetary support: For Development of new MSME Haats, upper limit of GIA will not exceed Rs. 50 lakh max.
  • For Renovation/up-gradation of existing Marketing Haats, upper limit of GIA will not exceed Rs.20 lakhs max.
  • Vendor Development Programmes: Maximum Budgetary support is as follows; State Level Vendor Development Programme (SLVDP): Rs. 1 Lakh max. (One day) National Level Vendor Development Programme (NLVDP): Rs. 10 lakhs max. for A class city and Rs.7.0 lakh max. for other cities. (2-3 days)
  • International/National Workshops/Seminars.: Maximum Budgetary Support would be Rs 5.0 lakh maximum or actual whichever is less and for National Workshop/Seminar and Rs 7.5 Lakh maximum or actual whichever is less for International Workshop/Seminar
  • Awareness Programs: Maximum Budgetary support of Rs. 70,000/- max. per program (One day)

How to apply : Please visit below link at https://my.msme.gov.in/MyMsme/Reg/COM_Matu.aspx

B. International Cooperation (IC) Scheme

Objective : Marketing Support

Key Benefits

Reimbursement for participation/visit in international exhibitions/fairs
Reimbursement for holding international conferences and seminars by industry associations/Govt. organizations.

Scheme applicable for Existing Entrepreneurs

Detailed Information

  • Assistance provided under the scheme:
    For Participation in International Exhibition/Fair
    Economy class Air fare fair (maximum of Rs. 1 Lakh)
    Stall charges (maximum Rs. 1.25 Lakh)
    Freight Charges (maximum Rs. 25,000/-)
    Entry/Registration fee up to Rs. 5000/-
  • For Organizing International Conference in India
    Cost for organizing the event subject to a maximum of Rs. 4.50 Lakh
    Airfare for foreign speakers (minimum 03) up to a maximum of Rs. 2.50 lakh
    For more detailed information refer to Scheme guidelines, on the following link:
    https://msme.gov.in/sites/default/files/IC-Scheme-Guidelines-June-2018.pdf

How to apply : Applications can be submitted by eligible industry associations/organizations to avail the benefits under the scheme at the following link: https://ic.msme.gov.in/IC_APP/IC_Index.aspx

FAQs: Exhibition Participation Grants

1. What are the objectives of Procurement and Marketing Support scheme?

Procurement and Marketing Support scheme has following objectives:

To promote new market access initiatives like organizing / participation in National /International Trade Fairs / Exhibitions I MSME Expo etc.

To create awareness and educate the MSMEs on topics relevant for market access development.

To create more awareness about trade fairs, digital advertising, e-marketing, GST, GEM portal, Public Procurement policy and other related topics etc.

For more details: https://msme.gov.in/sites/default/files/Guidelines_PMS.pdf

2. What are the eligibility criteria of the PMS scheme?

Any Individual Manufacturing/Service MSEs registered at Udyog Aadhar Memorandum (UAM) portal.

3. Who is the implementing agency for the scheme?

The implementing agencies are:

Office of DC MSME through its field organizations namely MSME Development Institutes and Technology Centers.

Other field organizations of Ministry of MSME namely NSIC, KVIC, Coir Board.

State Governments through its department's /organizations/ corporations/ autonomous bodies and agencies.

Other central Govt. Ministries through its departments /organizations / corporations /autonomous bodies and agencies.

4. What is the procedure to apply for the scheme

Pl. refer https://my.msme.gov.in/MyMsme/Reg/COM_Matu.aspx

5. What are the components of the PMS schemes?

The components of the PMS scheme are mentioned below:

  • Participation of individual MSEs in domestic trade fairs/ exhibitions
  • Organizing Domestic Trade Fairs/ Exhibition and participation in trade fairs / exhibitions by the Ministry / Office of DC (MSME) / Government organizations
  • Capacity building of MSMEs in modern packaging technique
  • Development of Marketing Haats
  • Vendor Development Programmes
  • International/National Workshops/Seminars
  • Awareness Programs

Under each scheme component, eligible items and the scale of assistance are defined. It can be accessed at: https://msme.gov.in/sites/default/files/Guidelines_PMS.pdf

6. What support is provided by the Ministry for participation of MSMEs in international events?

Under the International Cooperation Scheme, financial assistance is provided on reimbursement basis to the State/Central Government organizations, industries/enterprises Associations and registered societies/trusts and organizations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet and for holding international conference and seminars which are in the interest of MSME sectors.

Eligible beneficiary organizations can apply to the Ministry directly to avail the assistance under IC Scheme as per Scheme Guidelines. For further details please visit http://www.dcmsme.gov.in

7. Who can apply under this scheme

Government Institutions and Registered Industry Associations associated with promotion and development of MSME sector.

8. How to apply under this scheme?

Applications for financial assistance can be sent in the prescribed form to the Director (International Cooperation), Ministry of MSME, Udyog Bhawan, New Delhi-110011. The detailed guidelines of International Cooperation Scheme including application form and claim form are available on the website of the Ministry namely https://my.msme.gov.in

1. What are the activities being implemented by NSIC under the Marketing Assistance Scheme?

a. Organizing Domestic Exhibitions

b. Participation in Exhibitions/ Trade Fairs in India

c. Support for Co-sponsoring of Exhibitions organized by other organizations /industry associations/agencies

d. Buyer-Seller Meets

e. Intensive Campaigns and Marketing Promotion Events

f. Other Support Activities (Listed in MAS)

2. Who is eligible for availing benefits under the Marketing Assistance Scheme?

Micro, Small & Medium Enterprises having Udyam Registration and entry on MSME databank are eligible for availing benefits under the Marketing Assistance Scheme.

3. What are the eligible components for availing subsidies under Marketing Assistance Scheme?

For participation in Domestic Exhibitions, Built- up stall is provided to MSMEs at subsidized rates.

4. How many times an MSME unit is eligible for participation in Domestic Exhibition?

An MSME unit is eligible for participation in One Domestic exhibition in a financial year. Units belonging to SC/ST entrepreneurs will be governed by special Marketing Assistance Scheme.

5. What is maximum budgetary limit for participation in a domestic exhibition?

Maximum Budgetary support for space rent and advt. & publicity for the event is as follows:

  • Regional: (State/District): Rs.30.00 Lakh max.
  • National: Rs.40.00 Lakh .max.
  • International: As decided by Empowered Committee subject to approval of Deptt. Of Expenditure.
  • The support is provided on 'First come First serve' basis.

6. When an MSME unit should apply for participation in domestic exhibition?

Please visit below link for participation in domestic exhibition at https://my.msme.gov.in/MyMsme/Reg/COM_Matu.aspx

MSME's may also visit to nearest MSME-DI and NSIC branch office at least 1-2 month prior to the commencement of the exhibition.

7. How do you define MSEs owned by SCI ST enterprises?

Definition of MSEs owned by SCI ST, as per clarification dated 25.6.2013 by Ministry of MSME under the provision of para 16 of Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012, is as given under:

  • In case of proprietary MSE, proprietor(s) shall be SC /ST.
  • In case of partnership MSE, the SCI ST partners shall be holding at least 51% shares in the unit
  • In case of Private Limited Companies, at least 51% share shall be held by SC/ ST promoters

8. What are the benefits and where do we need to go to avail marketing assistance scheme for participation in International and Domestic exhibitions?

For International Exhibition Participation MSME's can avail below benefits under International Cooperation Scheme.

  • Assistance provided under the scheme:
    For Participation in International Exhibition/Fair
    Economy class Air fare fair (maximum of Rs. 1 Lakh)
    Stall charges (maximum Rs. 1.25 Lakh)
    Freight Charges (maximum Rs. 25,000/-)
    Entry/Registration fee up to Rs. 5000/-
  • For Organizing International Conference in India
    Cost for organizing the event subject to a maximum of Rs. 4.50 Lakh
    Airfare for foreign speakers (minimum 03) up to a maximum of Rs. 2.50 lakh

For more detailed information refer to Scheme guidelines, on the following link: https://msme.gov.in/sites/default/files/IC-Scheme-Guidelines-June-2018.pdf

How to apply : Applications can be submitted by eligible industry associations/organizations to avail the benefits under the scheme at the following link: https://ic.msme.gov.in/IC_APP/IC_Index.aspx

For Domestic Exhibition Participation, MSME's can avail below benefits under Procurement and Marketing Support scheme

  • Participation of individual MSEs in domestic trade fairs/ exhibitions across the country: Maximum Budgetary support (space rent and contingency) up to Rs.1.5 Lakhs max. for Metro & A class citers. Rs 1.0 lakhs max. for Class B cities / NER/J&K/ Hilly States and for other cities Rs.0.80 lakhs max.
  • How to apply : Applications can be submitted by eligible industry associations/organizations to avail the benefits under the scheme at the following link https://my.msme.gov.in/MyMsme/Reg/COM_Matu.aspx

To know more details for availing the benefits for participation in International and Domestic exhibitions members can approach nearest government bodies National Small Industries Corporation (NSIC) Limited and (MSME DI) MSME Development Institute.

MSME members can avail this benefit of Marketing Assistance for participation in International/Domestic fairs. MSME units are entitled to get subsidies of space rent and airfare for participation in International trade fair/domestic fair. Please note you will have to start the enrolment and preapproval process, at least 2 months prior to participation for International fair/domestic fair in order to avoid delay.

9. What scheme does the Ministry have for providing marketing support to MSMEs?

The Ministry has Procurement and Marketing Support scheme and International Coopertaion Scheme for providing marketing support to MSMEs and for capturing the new market opportunities through organizing / participating in various domestic & international exhibitions/ trade fairs, Buyer-Seller meets intensive-campaigns and other marketing events.

10. How can the MSME's avail the grants for domestic exhibitions through?

For participation in domestic exhibitions members may visit the MSME-DI/NSIC office and may request them individually for availing the grants for listed exhibitions and may also approach for unlisted exhibitions. They can apply through below mentioned website: https://my.msme.gov.in/MyMsme/Reg/COM_Matu.aspx

11. What support is provided by the Ministry for participation of MSMEs in international events?

Under the International Cooperation Scheme, financial assistance is provided on reimbursement basis to the State/Central Government organizations, industries/enterprises Associations and registered societies/trusts and organizations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet and for holding international conference and seminars which are in the interest of MSME sectors.

Eligible beneficiary organizations can apply to the Ministry directly to avail the assistance under IC Scheme as per Scheme Guidelines. For further details please visit www.dcmsme.gov.in

12. Who can avail the benefits of the Marketing Assistance schemes?

Any MSME registered unit.

13. Can the units apply under these schemes at any time of the year?

Units can apply under these schemes at any time of the year. But they should apply minimum 2 months in advance of the participation in the event.

14. What is the mechanism for disbursement of assistance to the unit?

The assistance is provided in form of re-imbursement after submission of all the related expense details with supporting.

15. Whether the Scheme is applicable for new MSME registered units?

Yes.

16. Are these schemes limited to specific sectors only?

No. These schemes can be availed by any unit in any sector subject to approval of their application by the screening committee.

17. For these schemes can units apply individually or they have to apply through any trade association / organization?

Any unit can apply in either way individually for domestic exhibitions or through a trade association / organizations in a group of at least 10 MSME's for International exhibitions.

18.What support is provided by the Ministry for participation of MSMEs in international events?

Under the International Cooperation Scheme, financial assistance is provided on reimbursement basis to the State/Central Government organizations, industries/enterprises Associations and registered societies/trusts and organizations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet and for holding international conference and seminars which are in the interest of MSME sectors. Eligible beneficiary organizations can apply to the Ministry directly to avail the assistance under IC Scheme as per Scheme Guidelines. For further details please visit www.dcmsme.gov.in

Technology Support: for improving manufacturing competitiveness

National Manufacturing Competitiveness Programme (NMCP)

The National Manufacturing Competitiveness Programme (NMCP) is the nodal programme of the Government to develop global competitiveness among Indian MSMEs. The Programme was initiated in 2007-08. This programme targets at enhancing the entire value chain of the MSME sector through the following schemes:

  • Lean Manufacturing Competitiveness Scheme for MSMEs;
  • Promotion of Information & Communication Tools (ICT) in MSME sector;
  • Technology and Quality Up gradation Support to MSMEs;
  • Design Clinics scheme for MSMEs;
  • Enabling Manufacturing Sector to be Competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTT);
  • Marketing Assistance and Technology Up gradation Scheme for MSMEs;
  • Setting up of Mini Tool Room under PPP Mode;
  • National campaign for building awareness on Intellectual Property Rights (IPR);
  • Support for Entrepreneurial and Managerial Development of SMEs through Incubators.
  • Bar Code under Market Development Assistance (MDA) scheme.

A. MSME Technology Centres (TCs) (Existing TCs + New TCs + Extension Centers spread all over country)

MSME Technology Centres (TCs) (Existing TCs + New TCs + Extension Centers spread all over country)

Objective : Technology support, Skill development, Product D

Key Benefits

  • Design & Manufacture of Dies, Moulds using Latest Technology
  • Help in prototyping new product

Skill Development:

Tool Design, Machinist, CNC Machines, PLC, Mechatronics, CAD/CAM, Footwear, Fragrance, Glass Mfg, Automation.

Consultancy: Tool Design, new product development.

Scheme applicable for

Existing Entrepreneurs / Aspiring Entrepreneurs

Detailed Information

  • Training programs offered by TCs range from 2 weeks to 4 years. 76 programs are NSQF Complaint.
  • Long term trainees are well placed in industry.
  • Customized training programs may also be launched.
  • TC Kannauj may provide consultancy for sanitizer mfg.
  • TC Meerut can do PPE Coverall testing.

How to apply :

1. Individuals may apply for training programs through websites of the respective TCs. Online training programs also available.
2. MSMEs can approach directly for moulds, dies, product development
3. Consultant
Contact details available on websites of TCs.
Firms may approach TCs for hiring skilled manpower.

To know more about Tool rooms please visit dcmsme.gov.in/Technology_Centres.htm

FAQs

1. What benefits do the MSME Technology Centres/Tool Rooms of Ministry of MSME provide to MSMEs?

MSME Technology Centres are equipped with state-of-the-art machinery & equipment. They are engaged in designing and manufacturing of quality tools, which are necessary for producing quality products and improve the competitiveness of MSMEs in national and international markets. They also conduct training programmes to provide skilled manpower to industries specially MSMEs. The placement of trainees trained in Tool Room is more than 90%. There are 18 Technology Centres under DC (MSME), a list of MSME Technology Centres and their details is available in the website http://dcmsme.gov.in/Toolroom_tdcs.htm

B. Information & Communication Tools (ICT)

What support is provided by the Ministry for promotion of Information & Communication Tools (ICT) in MSME Sector?

The Ministry implements the Information and Communication Technology (ICT) scheme to encourage and assist Indian MSMEs to adopt ICT Tools and Applications in their production and business processes, and thereby improve their productivity and competitiveness in National and International Market.

C. Cluster development

Objective :Technology support/Skill development

Key Benefits

  • Creation of Common Facility Centers including Plug & Play Facilities
  • Thematic Interventions- Activities such as Training Programmes, Exposure Visits

Scheme applicable for Existing Entrepreneurs (in form of a SPV)

Detailed Information

  • Common Facility Centers: Creation of "tangible assets" such as Common Production/Processing Centre, Design Centers, Testing Facilities including Plug & Play Facilities. GoI Assistance: upto 90% of the maximum Project cost of Rs. 20 crore
  • Infrastructure Development: Development of land, roads, drainage, power distribution etc. in new / existing industrial (multi-product) areas / estates / Flatted Factory Complex. GoI Assistance: upto 80% of the maximum Project cost of Rs. 15 crore
  • Marketing Hubs / Exhibition Centres by Associations: Establishing Marketing Hubs/Exhibition Centres at central places for display and sale of products. GoI Assistance: upto 80% of the maximum Project cost of Rs. 10 crore
  • Thematic Interventions: Activities such as Training Programmes, Exposure Visits, BDS provisioning etc. for approved/ completed CFCs. GoI Assistance: Rs.2.00 lakh for each activity, maximum Rs.10 lakh per CFC
  • State Innovative Cluster Development Programme: Co-funding of the CFC projects of State Cluster Development Programme on matching share basis. GoI Assistance: GoI fund would be limited to State Government share or Rs.5.00 crore whichever is lower

For details please contact nearby MSME-Development Institute/ District Industry Centre.

How to apply : Please visit https://cluster.dcmsme.gov.in/

FAQs

1. What is Cluster?

A cluster is a group of enterprises located within an identifiable and as far as practicable, contiguous area or a value chain that goes beyond a geographical area and producing same/similar products/complementary products/services, which can be linked together by common physical infrastructure facilities that help address their common challenges. The essential characteristics of enterprises in a cluster are (a) Similarity or complementarity in the methods of production, quality control & testing, energy consumption, pollution control, etc., (b) Similar level of technology & marketing strategies/practices, (c) Similar channels for communication among the members of the cluster, (d) Common market & skill needs and/or (e) Common challenges & opportunities that the cluster faces.

2. What is MSE-CDP?

Micro & Small Enterprises - Cluster Development Programme (MSE-CDP), MSE-CDP approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country.

3. What are the objectives of MSE-CDP?

Following are objectives offset-CDP:
To support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills & quality, market access, etc.
To build capacity of MSEs for common supportive action through formation of self-help groups, consortia, upgradation of associations, etc.
To create/upgrade infrastructural facilities in the new/existing Industrial Areas/Clusters of MSEs.
To set up Common Facility Centers (for testing, training, raw material depot, effluent treatment, complementing production processes, etc.).
Promotion of green & sustainable manufacturing technology for the clusters to enable units switch to sustainable and green production processes and products.

4. Which are the components covered under MSE-CDP?

Following are the components for which GoI assistance is provided under MSE-CDP:

  • Setting up of Common Facility Centers (Common Production/Processing Centre, Design Centre, Testing Centre etc.).
  • Creation/upgradation of infrastructural facilities in the new/existing industrial areas/ clusters of MSEs.
  • Establishing Marketing Hubs/Exhibition Centers at central places for display and sale of products of Micro and Small Enterprises.
  • Implementation of Thematic Interventions in approved/completed CFCs for following activities:
  • Training Programs
  • Exposure Visits.
  • Strengthening the Business Development Service (BDS) provision through a panel of service providers.
  • Any other activity related to creating business eco-system in clusters
  • Support to State Innovative Cluster Development Programme, this component would provide co-funding of the CFC projects of State Cluster Development Programme on matching share basis.

For further details please visit http://www.dcmsme.gov.in/MSE-CDProg.htm .

Public Procurement Policy

5. What is the support available for cluster development?

The Ministry is implementing the Micro and Small Enterprises â€" Cluster Development Programme (MSE-CDP) wherein support is provided for Diagnostic Study; Soft Interventions like general awareness, counseling, motivation and trust building, exposure visits, market development including exports, participation in seminars, workshops and training programmes on technology upgradation etc.; Hard Interventions like setting up of Common Facility Centers (Common Production/Processing Centre, Design Centre, Testing Centre etc.) and creation/upgradation of infrastructural facilities in the new/existing industrial areas/ clusters of MSEs. For further details please visit www.dcmsme.gov.in

D. Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

Objective

Organize traditional industry artisans into clusters by providing Technology Support, Marketing Support, Skill Development

Key Benefits :

  • Support to traditional artisans to provide sustainable employment
  • Government of India support up to Rs. 2.5 cr. up to 500 artisans and Rs. 5 cr. for more than 500 artisans
  • Set up physical infrastructure with CFCs, latest machines, training, etc. in clusters.

Scheme applicable for

Existing artisans from traditional industries

Detailed Information

Government of India supports traditional industry artisans to provide them sustainable employment through Hard Intervention in setting up physical infrastructure with CFCs, raw material banks, latest machines, and Soft Intervention in skill development, market promotion initiatives, etc. in clusters.

Government of India gives 90% (95% in NER, J&K and Hill Areas) of Hard Intervention cost and entire cost of Soft Intervention

How to apply : To know more about the scheme please visit https://sfurti.msme.gov.in/SFURTI/Home.aspx

E. Lean Manufacturing Competitiveness for MSMEs

Objective : Technology support

Key Benefits

Financial assistance is provided for implementation of lean manufacturing techniques, primarily the cost of lean manufacturing consultant (80% by GoI and 20% by beneficiaries).

Scheme applicable for Existing Entrepreneurs

Detailed Information

The objectives of the Scheme are to enhance the manufacturing competitiveness of MSMEs through the application of various Lean Manufacturing (LM) techniques by;

  • Reducing waste
  • Increasing productivity
  • Introducing innovative practices for improving overall competitiveness;
  • Inculcating good management systems; and
  • Imbibing a culture of continuous improvement.

How to apply : To know more kindly please visit http://www.dcmsme.gov.in/schemes/clcs-tus/LEAN-Operational-Guidlelines.pdf

F. ZED Certification Scheme

Objective : Technology support

Key Benefits

  • Promote adaptation of Quality tools/systems and Energy Efficient manufacturing.
  • Financial assistance will be provided to the MSMEs in obtaining a ZED certification.
  • Reimbursement of Certification fees/Consultancy charges on successful certification, subject to an upper ceiling as per the scheme guideline. This can be claimed only once each for National and International Standards.
  • For MSMEs supplying for Defence, reimbursement shall be admissible additionally on Defence related certificates/Standards only once.

Scheme applicable for Existing Entrepreneurs

Detailed Information

The scheme envisages promotion of Zero Defect and Zero Effect (ZED) manufacturing amongst MSMEs and ZED Assessment for their certification so as to:

  • Encourage and Enable MSMEs for manufacturing of quality products using latest technology tools & to constantly upgrade their processes for achievement of high productivity and high quality with the least effect on the environment.
  • Develop an Ecosystem for Zero Defect Zero Effect Manufacturing in MSMEs, for enhancing competitiveness and enabling exports.
  • Promote adoption of Quality and recognizing the efforts of successful MSMEs.
  • Increase public awareness on demanding Zero Defect and Zero Effect Products through the ZED Rating and Grievance Redressal Portal.

How to apply : For more details please visit link: http://dcmsme.gov.in/schemes/clcs-tus/Operational_Guidelines_ZED.pdf

G. Design Clinic for Design Expertise to MSMEs

Objective : Technology Support

Key Benefits

  • To facilitate MSMEs to develop new Design strategies and or design related products through design interventions and consultancy. Financial assistance to the MSMEs for engagement of design consultants for design intervention (GoI contribution @ 75% for micro, 60% for SMEs for the project range up to Rs. 40 lakh).
  • The Design Scheme shall support design work by reimbursing 75% of expenses incurred up to Rs. 1.5 lakh for final year student project done for MSMEs.

Scheme applicable for Existing Entrepreneurs

Detailed Information

To bring Indian manufacturing sector and Design expertise/ Design fraternity on to a common platform and to provide expert advice and cost-effective solution on real time design problems, resulting in new product development, continuous improvement and value addition for existing products including new products.

How to apply : MSMEs can submit their proposal to Implementing Agency (IA) as per scheme guideline. For more details on scheme guidelines please visit below link:
http://www.dcmsme.gov.in/schemes/Design-Guidelines-CLCS-TUS-2019-2020.pdf

FAQs

1. What support is provided by the Ministry to improve design of products produced in MSME sector?

The Ministry implements the Design Clinic Scheme for Design Expertise to Micro, Small and Medium Enterprises (MSME) Sector is to improve the design of the product to meet global challenges and compete with similar products domestically and internationally. It is launched to benefit MSMEs by creating a dynamic platform to provide expert solutions to real time Design problems and add value to existing products. The goal of this scheme is to help MSME manufacturing industries move up the value chain by switching the production mode from original equipment manufacturing to original design manufacturing and hence original brand manufacturing. In the Design Clinic scheme, the value additions to an idea or a concept are imparted through interaction at a lesser cost to a specific industry/sector. The expected outcome of such interventions is new product development by design improvement and value addition for existing products. For further details please visit www.dcmsme.gov.in

H. Digital MSME

Key Benefits:

To make MSMEs digitally empowered and motivate them to adopt Information Communication Technology (ICT) tools and application in their production and business process.

Scheme applicable for Existing Entrepreneurs

Detailed Information

The main objective of scheme is to make MSMEs digitally empowered and motivate them to adopt ICT tools and applications in their production & business processes with a view to improve their competitiveness in national and international Market.

How to apply : To know more in detail please visit the link: http://www.dcmsme.gov.in/schemes/DigitalMSME-Guideline-CLCS-TUS-2019-2020.pdf

I. Promotion of MSMEs in NER and Sikkim- a sub component of Central Sector Scheme "Technology and Enterprise, Resource Center"

Objective: Technology support/Skill development

Key Benefits:

  • Establishment & Up-gradation of Mini Technology Centers.
  • Development of New & Existing Industrial Estates
  • Capacity Building of Officers engaged in promotion of MSMEs in NER & Sikkim.

Scheme applicable for Existing Entrepreneurs / Aspiring Entrepreneurs

Detailed Information

  • Setting up new and modernization of existing Mini Technology Centres: Financial assistance of 90% of the total project cost (maximum assistance Rs. 10.0 Cr.)
  • Development of new and existing Industrial Estates: Financial assistance of 80% of the total project cost (maximum assistance Rs. 8.0 Cr.)
  • Capacity Building of Officers: Financial Assistance up to Rs. 1.5 lakh per participant.
  • Other Activities: Financial Assistance upto Rs. 1.0 Cr.

For details please contact nearby MSME-Development Institute/ District Industry Centre.

How to apply : Proposals through the State Govts. For more details please visit link http://www.dcmsme.gov.in/schemes/Guidlines.07.8.19.pdf

FAQs

1. What support is provided by the Ministry to promote energy conservation in the manufacturing process for SMEs?

The Ministry implements the "Technology and Quality Upgradation Support to Micro, Small and Medium Enterprises (TEQUP)" which focuses on two important aspects, namely, enhancing competitiveness of MSME sector through Energy Efficiency and Product Quality Certification. The basic objective of this scheme is to encourage MSMEs in adopting energy efficient technologies and to improve product quality of manufacturing in MSMEs. It is a well-known fact that energy consumption is a significant component in the cost structure of almost any manufacturing/ production activity. Adopting energy efficient technologies curtails the cost of energy there by reducing production cost and increasing competitiveness. Under this scheme, a capital subsidy of 25% of the project cost subject to a maximum of Rs. 10.00 lakh shall be provided to the registered MSME units. While 25% of the project cost will be provided as subsidy by the Government of India, the balance amount is to be funded through loan from SIDBI/banks/financial institutions. The minimum contribution as required by the funding agency will have to be made by the MSME unit. For further details please visit www.dcmsme.gov.in

2. What support is provided by the Ministry to improve quality of products produced in MSME sector?

The TEQUP scheme envisages another activity, namely, Product Quality Certification. The main objective of this scheme is to encourage MSMEs to Acquire Product Certification Licenses from National / International Bodies, thereby improving their competitiveness. The primary objective of this activity is to provide subsidy to MSME units towards the expenditure incurred by them for obtaining product certification licenses from National / International standardization Bodies. Under this Activity, MSME manufacturing units will be provided subsidy to the extent of 75% of the actual expenditure, towards licensing of product to National/International Standards. The maximum GOI assistance allowed per MSME is Rs.1.5 lakh for obtaining product licensing /Marking to National Standards and Rs. 2.0 lakh for obtaining product licensing /Marking to International standards. One MSME unit can apply only once under the scheme period. For further details please visit www.dcmsme.gov.in

3. What support is provided by the Ministry for improving manufacturing competitiveness?

To enhance the competitiveness amongst the MSMEs, there are six components for capacity building, technology upgradation, design interventions, products, IP rights to improve the productivity and handhold to deliver top quality productivity using lean technologies, to nurture ideas from professional beyond the traditional and to make MSME digitally powered under the umbrella program of Credit linked Capital subsidy Scheme and Technology Upgradation (CLS-TUS)

Lean Manufacturing Competitiveness Scheme for MSMEs: Financial assistance up to Rs. 36 lakh(Max. per mini cluster of 10 units, minimum 4 units for a period 10 months or till the completion)

Zero Defect and Zero Effect: Reimbursement for obtaining National and International standard certification

Digital MSME: Assistance is being provided for business solution software i.e ERP, etc. though e-platforms

Intellectual Property Rights: Reimbursement for registration of patent, trade mark, geographical indication (GI) are:

Domestic Patent: up to Rs. 1 lakh

Foreign Patent: up to TRs. 5 lakh

GI Registration: up to Rs. 2 lakh

Trademark: up to 0.10 lakh

Financial support up to 1.00 Cr. for setting up IP facilitation centres for a period of 5years.

Design Expertise to Manufacturing MSME Sector: Financial assistance to MSMEs for engagement of design consultants for design interventions (for the project range Rs. 15 lakh to Rs.40lakh)
Financial assistance of Rs. 1.5 lakh for final year student project done for MSMEs

Support for Entrepreneurs and Managerial Development of MSMEs through incubators: Financial support for untiring for developing of idea: maximum up to Rs. 15.00 lakh Details may be seen at http://www.dcmsme.gov.in/schemes/clcs-tus_scm.htm

The applicant may apply through online portal http://my.msme.gov.in

J. ISO certification

1. Is there support available for obtaining ISO certification?

The Ministry is implementing the ISO: 9001/14001/HACCP Certification Reimbursement Scheme for Micro & Small Enterprises (MSEs) for reimbursement of certification expenses, only to those MSEs which have acquired Quality Management Systems (QMS)/ISO 9001 and /or Environment Management Systems (EMS)/ ISO14001and / or Food Safety Systems (HACCP) Certification. Under the scheme provides reimbursement of 75% of the certification expenses up to a maximum of Rs.75,000/- (Rupees seventy five thousand only) to each unit as one-time reimbursement only to those MSEs which have acquired Quality Management Systems (QMS)/ISO 9001 and /or Environment Management Systems (EMS)/ ISO14001and / or Food Safety Systems (HACCP) Certification. For further details please visit www.dcmsme.gov.in.

K. Awareness on Intellectual Property Rights (IPR)

Objective : Technology support

Key Benefits

Reimbursement of Patent/Trademark/GI:
Patent:
A. Indian Patent upto Rs.1.00 Lakh
B. Foreign Patent upto Rs. 5.00 Lakh
Trademark upto Rs. 0.10 Lakh
GI Registration Rs. 2.00 Lakh
Assistance for setting up IP Facilitation Centre upto Rs. 1.00 cr. for period of 5 years

Scheme applicable for Existing Entrepreneurs

Detailed Information

  • To enhance the awareness of Intellectual Property Rights (IPRs) amongst the MSMEs to encourage creative intellectual endeavor in Indian economy;
  • To take suitable measures for the protection of ideas, technological innovation and knowledge-driven business strategies developed by the MSMEs for;
  • To provide appropriate facilities and support for protection and commercialization of Intellectual Property (IP) for the benefit of MSME sector;
  • To assist SMEs in effective Utilization of IPR Tools for technology up-gradation, market and business promotion and competitiveness. enhancement.

How to apply : View IPR Guidelines at http://www.dcmsme.gov.in/schemes/IPR-Guidelines-CLCS-TUS-2019-2020.pdf

To know more about the scheme please visit the link: https://my.msme.gov.in/MyMsme/Reg/COM_IprReim.aspx

FAQs

1. Whether there is any scheme for assisting MSMEs for Intellectual Property Rights?

Under the National Manufacturing Competitiveness Programme (NMCP) to enhance the competitiveness of the SMEs sector, O/o DC (MSME) is implementing a scheme "Building Awareness on Intellectual Property Rights (IPR)" for the MSME. The objective of the scheme is to enhance awareness of MSME about Intellectual Property Rights (IPRs) to take measure for the protecting their ideas and business strategies Accordingly, to enable the MSME sector to face the present challenges of liberalization, various activities on IPR are being implemented under this scheme. For further details please visit http://my.msme.gov.in .

L. Entrepreneurial and Managerial Development of SMEs through Incubators

Objective : New Enterprise Creation

Key Benefits

  • Funding support up to Rs. 15 lakhs for development of innovative ideas in to commercial products
  • Seed funding support up to Rs. 100 lakhs for setting up new units for commercialization of successful innovative ideas

Scheme applicable for Existing Entrepreneurs/Aspiring Entrepreneurs

Detailed Information

The main objective of the scheme is to promote & support untapped creativity of individual and to promote adoption of latest technologies in manufacturing as well as Knowledge based innovative MSMEs (ventures) that seek the validation of their ideas at the proof of concept level. The scheme also supports engagement with Enablers who will advise such MSMEs in expanding the business by supporting them in design, strategy and execution. The Enablers will play a pivotal role and would be integral part of the business development.

How to apply : For more details please visit the below link http://www.dcmsme.gov.in/schemes/Incubator-Guidelines-CLCS-TUS-2019-2020.pdf

M. Support for setting up of 'Business Incubators'

The Ministry implements the Support for Entrepreneurial and Managerial Development of SME's Through Incubators". The main purpose of the scheme is to nurture innovative business ideas (new/indigenous technology, processes, products, procedures, etc), which could be commercialized in a year. Under the Scheme, financial assistance between 75% to 85% of the project cost upto maximum of Rs. 8 lakh per idea/unit, provided to Business Incubators (BIs). The BIs are also eligible to avail Rs. 3.78 lakh for infrastructure and training expenses for incubating 10 ideas. Any individual or Micro and Small Industries (MSEs) that has innovative business idea at near commercialization stage can approach the Business Incubators approved under the scheme. Under the scheme, various institutions like Engineering Colleges, Management Institutions, Research labs, etc. that have in-house incubation facilities and faculty for providing handholding support to new idea/entrepreneur can apply in the prescribed application form. For further details please visit www.dcmsme.gov.in.

The incubational support will be provided by Host Institutions, like:

  • Indian Institutes of Technology (IITs)
  • National Institutes of Technology ( NITs)
  • Engineering Colleges
  • Technology Development Centres, Tool Rooms, etc
  • Other recognized R&D&/or Technical Institutes/Centres, Development Institutes of DIP&P in the field of Paper, Rubber, Machine Tools, etc.

Business Incubator is a unit which will be given assistance for developing and doing research or study on any innovative idea that they want to develop as a business. For further details please refer the scheme document.

The assistance provided per incubatee /idea can be any amount between Rs. 4 Lakhs to Rs. 8 lakhs depending upon the requirement.

Yes. Under this scheme, 100 "Business Incubators" (BIs) are to be set up under Technology (Host) Institutions [@ say 25 per financial year] and each BI is expected to help the incubation of about 10 new ideas or units.

The application can be sent to MSME or any of the implementing agencies listed in the scheme document.

N. Training Institutions Scheme

The Ministry is implementing the Assisting to Training Institutions Scheme which envisages financial assistance for establishment of new institutions (EDIs), strengthening the infrastructure of the existing EDIs and for supporting entrepreneurship and skill development activities. The main objectives of the scheme are development of indigenous entrepreneurship from all walks of life for developing new micro and small enterprises, enlarging the entrepreneurial base and encouraging self-employment in rural as well as urban areas, by providing training to first generation entrepreneurs and assisting them in setting up of enterprises. The assistance shall be provided to these training institutions in the form of capital grant for creation / strengthening of infrastructure and programme support for conducting entrepreneurship development and skill development programmes.

O. Quality Management Standards and Quality Technology Tools (QMS/QTT)

Under the National Manufacturing Competitiveness Programme (NMCP) Scheme, one component is "Enabling MSME manufacturing sector to be competitive through Quality Management Standards/Quality Technology Tools (QMS/QTT)" was initiated in the XIth Five year plan. The main objective of the scheme is to sensitize and encourage MSEs to adopt latest Quality Management Standards/Quality Technology Tools (QMS/QTT) and to keep a watch on sectoral developments by undertaking the stated activities. The major activities under the Scheme are as:

  • Introduction of appropriate course modules for technical institutions
  • Organizing awareness campaigns for micro & small enterprises.
  • Organizing competitionâ€"watch (c-watch).
  • Implementation of quality management standards and quality technology tools in selected micro & small enterprises.
  • Monitoring international study missions.

P. Financial Assistance on 'Bar-Code'an NMCP Scheme

75% reimbursement of only one-time registration fee and 75% of annual recurring fee for first three years paid by MSEs to GS1 India for using of Bar Coding.

The assistance is provided in form of re-imbursement after submission of all the related expense details with supporting.

Yes.

Skill Development

A. Entrepreneurship and Skill Development Programme (ESDP)

The objective of the programme is to motivate the youth to consider self employment or entrepreneurship as one of the career options. The ultimate objective is to promote new enterprises, capacity building of existing MSMEs and inculcate entrepreneurial culture in the country. As per scheme guidelines, in EAP and E-SDP there should be overall 40% women participation.

The programe includes the following :-

  • Industrial Motivation Campaigns (IMCs):- One day/Two days Industrial Motivation Campaigns are organized to identify and motivate traditional / non-traditional entrepreneurs having potential for setting up MSEs and for Clusters SPVs/ Industry Associations/ Chambers for propagating schemes for MSMEs.
  • Entrepreneurship Awareness Programmes (EAPs):- Entrepreneurship Awareness Programmes are being organized regularly to nurture the talent of youth by enlightening them on various aspects of industrial activity required for setting up MSEs. These EAPs are generally conducted in ITIs, Polytechnics and other technical institutions, where skill is available to motivate them towards self-employment.
  • Entrepreneurship-cum-Skill Development Programme (E-SDP):- Comprehensive training programmes are organized to upgrade skills of prospective entrepreneurs, existing workforce and also develop skills of new workers and technicians of MSEs by organising various technical cum skill development training programmes .
  • Management Development Programmes (MDPs):- The objective of imparting training here is to improve the decision-making capabilities of existing & potential entrepreneurs resulting in higher productivity and profitability.

Vocational and Educational Training:

The Tool Rooms and Technology Development Centers (TDCs) of the Ministry conduct long term, short term, trade/field-specific and industry-specific tailor-made courses as well as vocational training programmes.

To Take advantage of this please contact our Development Institutes or Tool Rooms or our control rooms which are spread across the country.

ESDP Scheme (In detail)

Objective New Enterprise Creation and Skill development

Key Benefits

  • Motivation
  • Entrepreneurship & Skill Training
  • Management Training

Scheme applicable for

  • Aspiring Entrepreneurs
  • Aspiring and Existing Entrepreneurs
  • Existing Entrepreneurs

Detailed Information

  • Entrepreneurship /Self-employment Motivation to different sections of the society including SC/ST/Women, differently abled, Ex-servicemen and BPL persons as career options.
  • Enterprise Facilitation for Ideation, Mentoring and incubation, Credit facilitation, Market accessibility, Enterprise Clinic, Diagnostic studies in the event of sickness, counseling and other facilities.
  • Entrepreneurship & Skill Training in Agro Based Products, Hosiery, Food & Fruit Processing Industries, Carpet Weaving, Mechanical Engineering Workshop/ Machine Shop, Heat Treatment, Electroplating, Basic/Advance Welding/Fabrication/Sheet metal work, Basic/Advance Carpentry, Glass & Ceramics etc.
  • Management capacity building Training to Existing Entrepreneurs and their supervisory staff in Industrial Management, Human Resource Management, Marketing Management, Export Management/Documentation & Procedures, Materials Management, Financial/Working Capital Management, Information Technology, Digital Marketing, Quality Management/QMS/ISO 9000/EMS, WTO, IPR, Supply Chain Management, Retail Management, Logistics Management etc.

How to apply : To be apply through MSME-DI, MSME-TC websites and to know more about the scheme link- http://dcmsme.gov.in/Enterprise&skillDevelopment.html

B. Assistance to Training Institutions (ATI) Scheme

Objective Skill development

Key Benefits

  • Support for infrastructure and capacity building of training institutions of Ministry and existing State level EDIs.
  • Support for skill development programmes by training institutions of the Ministry of MSME.

Scheme applicable for

  • Only for training institutions of Ministry of MSME and State level EDIs.

Detailed Information

  • Assistance may be provided under the scheme for creation or strengthening/ expansion of infrastructure, including opening of new branches/centres to training institutions of Ministry of MSME and for meeting revenue deficit, if any, of National Institute for Micro, Small and Medium Enterprises (NIMSME).
  • The maximum assistance under the scheme to a State level EDI will be restricted to Rs.250 lakh in each case. This grant would be utilized for development of physical infrastructure, equipment, faculty training and development of capability in undertaking studies and research on issues related to MSME sector. This grant would be over and above the grant, if any, received by that institution earlier under the ATI scheme
  • For the purpose of grant under this category, an EDI owned and controlled by a State Government / UT would be selected as recommended by the State Government. The selected state level EDI will have to enter into a partnership agreement (or, MOU) with NIMSME to formulate and implement the approved proposal.

How to apply : Based on proposals received from the training institutions of the Ministry of MSME and State level EDIs. Please visit the below link to know more about the scheme: https://msme.gov.in/node/1767#ati1

C. A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)

Objective Promote Skill Development and Entrepreneurship

Key Benefits

  • Set up LBIs and TBIs to skill youths for own enterprises and incubation of innovative ideas
  • Maximum Rs. 1 cr. to Government agencies and maximum Rs. 50 lakhs to private agencies for procuring plant and machinery
  • Maximum Rs. 1 cr. given to new TBIs and maximum Rs. 30 lakhs to existing TBIs for procurement of plants and machinery.

Scheme applicable for LBIs

  • Any agency/institution of Govt. of India/State Govt.
  • Any Private Institution under PPP mode with any agency of Govt. of India/State Govt.

Scheme applicable For TBIs:

  • Existing Incubation Centers under Ministries/ Departments of Govt. of India
  • National/ Regional institutions of Govt. of India/ State Govt.
  • New TBIs can be set up by Industry Associations, Academic Institutions, R&D labs, Universities, Govt. entities and Technology Parks

Detailed Information

  • LBIs are set up to train/skill youths in various vocations/fields primarily in agro-rural space to enable them, either to set up own enterprises or seek wage employment in related fields/industries.
  • TBIs are set up to promote youths to incubate new and innovative ideas in agro-rural space by providing basic incubation facilities.

How to apply : Proposal to be filled up as per the prescribed format given in https:// aspire.msme.gov.in and submitted to the Ministry through Member Secretary, Scheme Steering Committee at js.ari@nic.in .To know more about the scheme please visit https://aspire.msme.gov.in/ASPIRE/Home.aspx

FAQ's :

1. What is the support available for Skill Development?

The Ministry conducts various types of training programme through its various organizations for self-employment as well as wage employment. The training programmes are primarily focused to promote self-employment in the country. Thus, all type of programmes have input which provide necessary information and skills to a trainee to enable him to establish his own micro or a small enterprise. The programmes include two-week Entrepreneurship Development Programme (EDP), Six Week Entrepreneurship Skill Development Programme (ESDP). One weak Management Development Programme (MDP), One Day Industrial Motivation Campaign (IMC) etc. For Monitoring of the programme a web-based system has been developed where coordinator of the programme is bound to feed all details of trainees including his photo and phone no. on the website. The same will be linked to the call center of Ministry where real time feedback is obtained from trainees. For further details please visit http://dcmsme.gov.in/Enterprise&skillDevelopment.html

Scheme for Starters / New Entrepreneurs

A. Prime Minister's Employment Generation Programme (PMEGP)

Objective

Encourage new entrepreneurs to set up micro-enterprises through credit-linked subsidy support.

Key Benefits

  • Bank financed subsidy program for setting up new micro-enterprises in non-farm sector.
  • Margin Money subsidy on Bank Loan ranges from 15% to 35% for projects up to Rs. 25 lakhs in manufacturing and Rs. 10 lakhs in service sector
  • For beneficiaries belonging to special categories such as SC/ST/Women/PH/Minorities/Ex-Servicemen/NER, the margin money subsidy is 35% in rural areas and 25% in urban areas. The maximum cost of projects is Rs.25.00 lakh in the manufacturing sector and Rs.10.00 lakh in the service sector.

Scheme applicable for

Any individual above 18 years of age, SHGs, Charitable trusts, Registered Societies etc.

Detailed Information

  • The own contribution of the beneficiary is 10% of the project cost in case of general category and 5% of the project cost in case of reserved category (SC/ST/OBC/PH/Women/Ex Servicemen/ NER) beneficiaries.
  • If the application for loan is approved, Banks sanction and release the balance amount of 90 to 95 percent of the total project cost suitably for setting up of the units by the beneficiaries.
  • In order to have sustainability of the projects/units set up under the scheme, support services are also provided in the form of Backward & Forward Linkages by organizing events like awareness camps, workshops, EDP training to the beneficiaries, exhibitions, etc.
  • Government of India has introduced online process flow of application and disbursement of Margin Money directly to financing branches.
  • Corporation Bank was engaged as a single National Level Agency for operating the online fund flow system of PMEGP.
  • One-page online application form is mandatory for individuals and institutional beneficiaries on the e-portal. The application form/PMEGP MIS portal is mobile friendly. SMS/e-mail alerts sent to the applicant automatically by the system or by the concerned officials at the process of each stage.
  • Model Projects of different KVI activities have been put up on PMEGP e-portal for the benefit of potential beneficiaries.
  • Model Village Industries projects prepared by NSIC have also been linked to the website.
  • To increase the registration of MSMEs in the country, the Government has undertaken measures that the PMEGP units can adopt the Udyog Aadhar Memorandum (UAM) to register online.

How to apply : Please visit the below mentioned website to apply https://www.kviconline.gov.in/pmegpeportal/pmegphome/

B. 2nd Loan for Upgradation / Expansion of existing PMEGP / MUDRA units

Objective

Technology up-gradation and expansion of existing units through credit support

Key Benefits

  • To fulfill the need of additional financial assistance for upgradation and expansion of successful/well performing existing units
  • Maximum subsidy would be 15% of the project cost (20% for NER and Hill States). The balance amount of the total project cost is provided by Banks as term loan.

Scheme applicable for

  • Existing well performing PMEGP/MUDRA units

Detailed Information

  • Further financial assistance scheme for expansion/upgrade the existing PMEGP/MUDRA units for manufacturing and Service/Trading units from the year 2018-19
  • The maximum cost of the project under manufacturing sector for up-gradation is Rs.1.00 crore and Rs.25.00 lakh under Service/Trading sector.
  • Maximum subsidy would be 15% of the project cost (20% for NER and Hill States) i.e. Rs. 15.00 lakh in Non-NER and Rs. 20.00 Lakh for NER and Hill States. The balance amount of the total project cost are provided by Banks as term loan.
  • All existing units financed under PMEGP/MUDRA schemes running successfully whose Margin Money claim has been adjusted and the First loan (only CE) availed should have been repaid in stipulated time and WC may be exempted.
  • The units should have been making profit for the last three years.
  • Beneficiary may apply to the same financing bank, which sanctioned the loan for their unit, or to any other financing bank, which is willing to extend credit facility for second loan.
  • The beneficiary can choose any implementing agency and that may be different from the agency chosen for 1st loan.
  • Registration of Udyog Aadhar Memorandum (UAM) is mandatory.
  • The 2nd loan should lead to additional employment generation.
  • On PMEGP e-Portal, a separate application link provided to submit the application under 2nd loan for up-gradation.

How to apply : Please visit below link to apply https://www.kviconline.gov.in/pmegpeportal/pmegphome/

C. Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE)

Objective Credit support

Key Benefits

  • Credit guarantee for loans upto Rs. 2 crore, without collateral and third-party guarantee.
  • Guarantee coverage ranges from 85% (Micro Enterprise up to Rs 5 lakh) to 75% (others).
  • 50% coverage is for retail activity.

Scheme applicable for

Existing Entrepreneurs & Aspiring Entrepreneurs

Detailed Information

  • Any collateral/third party guarantee free credit facility (both fund as well as non-fund based) extended by eligible institutions, to new as well as existing Micro and Small Enterprises, including Service Enterprises, with a maximum credit cap of 200 lakh (Rupees Two Hundred lakh only) are eligible to be covered. Recently, guarantee coverage made eligible to select NBFCs and Small Finance banks.
  • The guarantee cover available under the scheme is to the extent of 50%/ 75% / 80% & 85% of the sanctioned amount of the credit facility. The extent of guarantee cover is 85% for micro enterprises for credit up to 5 lakhs. The extent of guarantee cover is 50% of the sanctioned amount of the credit facility for credit from 10 lakh to 100 lakhs per MSE borrower for retail trade activity.
  • The extent of guarantee cover is 80% for (i) Micro and Small Enterprises operated and/or owned by women; and (ii) all credits/loans in the North East Region (NER) for credit facilities upto 50 lakh. In case of default, Trust settles the claim up to 75% of the amount in default of the credit facility extended by the lending institution for credit facilities upto 200 lakh.

How to apply : Through Member Lending Institutions (Banks and NBFCs), To know more please visit https://www.cgtmse.in/

D. Entrepreneurship and Skill Development Programme (ESDP)

The objective of the programme is to motivate the youth to consider self employment or entrepreneurship as one of the career options. The ultimate objective is to promote new enterprises, capacity building of existing MSMEs and inculcate entrepreneurial culture in the country. As per scheme guidelines, in EAP and E-SDP there should be overall 40% women participation.

The programe includes the following :-

  • Industrial Motivation Campaigns (IMCs):-One day/Two days Industrial Motivation Campaigns are organized to identify and motivate traditional / non-traditional entrepreneurs having potential for setting up MSEs and for Clusters SPVs/ Industry Associations/ Chambers for propagating schemes for MSMEs.
  • Entrepreneurship Awareness Programmes (EAPs):- Entrepreneurship Awareness Programmes are being organized regularly to nurture the talent of youth by enlightening them on various aspects of industrial activity required for setting up MSEs. These EAPs are generally conducted in ITIs, Polytechnics and other technical institutions, where skill is available to motivate them towards self-employment.
  • Entrepreneurship-cum-Skill Development Programme (E-SDP):- Comprehensive training programmes are organized to upgrade skills of prospective entrepreneurs, existing workforce and also develop skills of new workers and technicians of MSEs by organising various technical cum skill development training programmes .
  • Management Development Programmes (MDPs):- The objective of imparting training here is to improve the decision-making capabilities of existing & potential entrepreneurs resulting in higher productivity and profitability.

Vocational and Educational Training:

The Tool Rooms and Technology Development Centers (TDCs) of the Ministry conduct long term, short term, trade/field-specific and industry-specific tailor-made courses as well as vocational training programmes.

To Take advantage of this please contact our Development Institutes or Tool Rooms or our control rooms which are spread all across the country.

Other Schemes and related FAQ's

A. Public Procurement Policy for MSEs Order, 2012

Objective : Providing Marketing support to the MSEs

Key Benefits

  • Tender set free of cost
  • Exemption from the payment of Earnest Money
  • In tender, participating MSEs quoting price within price band of L1+15% shall also be allowed to supply a portion of requirement by bringing down their price to L1 price in a situation where price is from someone other than an MSE and such MSE shall be allowed to supply upto 25% of the total tendered value.
  • 358 items reserved for exclusive procurement from MSEs.
  • The MSEs may also be given exemption in prior experience and turnover clauses.

Scheme applicable for

The Public Procurement Policy mandates 25% annual procurement from MSEs by Central Ministries /Departments/Public Sector Enterprises (CPSEs).

Public Procurement Policy is meant for procurement of only goods produced and services rendered by MSEs and works contract is not covered under the purview of Public Procurement Policy.

MSEs registered with District Industries Centre (DIC) or Khadi & Village Industries Commission (KVIC) or Khadi & Industries Board (KVIB) or Coir Board or national Small Industries Commission (NSIC) or Directorate of Handicrafts and Handlooms or any other body specified by Ministry of MSME or having Udyog Aadhaar Memorandum (UAM) are eligible to avail the benefits of the policy.

Detailed Information

Ministry of MSME has notified the Public Procurement Policy for MSEs Order, 2012 under Section 11 of MSMED- Act 2006 to provide marketing support to the MSEs which is effective from April 2012 and has become mandatory w.e.f 1st April 2015.

It was again reviewed in 2018 and amended vide SO 5670 (E) dated 9 November 2018.

The amended policy mandates 25% of annual procurement from MSEs by the Central Ministries/ Departments and CPSEs including 4% from MSEs owned by SC/ST and 3% from MSEs owned by Women

Any registered MSE can register themselves at GeM Portal and avail the benefits of the Public Procurement Policy.

How to apply : To know more about the scheme please visit http://dcmsme.gov.in

FAQ's

1.What is the share of procurement from MSEs out of the total procurement made by Central Government Ministries / Departments / Public Sector Undertakings?

Under amended Public Procurement Policy for MSEs, order 2012 a minimum 25 per cent share out of the total procurement by Central Government Ministries / Departments /Central Public Sector Undertakings are to be made from MSEs.

2.Whether there is any reservation for MSEs owned by SC/ST entrepreneurs?

Yes, out of 25% target of annual procurement from MSEs, a sub-target of 4% is earmarked for procurement from MSEs owned by Scheduled Caste (SC) / Scheduled Tribe (ST) entrepreneurs and 3%from MSEs owned by women entrepreneur. However, in event of failure of such MSEs to participate in tender process or meet tender requirements and L1 price, 4% sub-target for procurement earmarked for MSEs owned by SC/ST entrepreneurs and 3% earmarked to women entrepreneur will be met from other MSEs.

3.Who is eligible for availing benefits under the Public Procurement Policy?

The MSEs who are registered with District Industries Centers (DICs) / Khadi & Village Industries Commission (KVIC) / Khadi & Village Industries Board (KVIB) / Coir Board / NSIC / Directorate ofHandicrafts and Handloom or having Udyog Aadhaar Memorandum (UAM) or registered with any other body specified by Ministry of Micro, Small& Medium Enterprises (M/o MSME) areeligible for availing benefitsunder the Public Procurement Policy.

4.What is the date of implementation of this Policy?

The policy is applicable with effect from 1.4.2012. However, the policy has become mandatory with effect from 1.4.2015 onwards.

5.Whether Policy is transparent, competitive and cost effective?

The Policy rests upon core principles of competitiveness, adhering to sound procurement practices and execution of orders for supply of goods and services in accordance with a system which is fair, equitable, transparent, competitive and cost effective.

6.Whether the Policy is implemented in parts or fully from its inception?

As per Gazette Notification (S.O. 5670(E)dated 8th November,2018, It is mandatory for all CPSEs to procure at least 25% of their annual procurement from MSEs including 4% from MSEs owned by SC/ST entrepreneur and 3% from MSEs owned by women entrepreneur.

7.Whether there is any monitoring system for assessing the Government procurement from MSEs?

In tender, participating MSEs quoting price within band of L1+15% shall also be allowed to supply a portion of requirement by bringing down their price to L1 price in a situation where L1 price is from someone other than an MSE. Such MSEs shall be allowed to supply at least 25% of total tendered value. In case of more than one such MSE, the supply will be shared proportionately (to tendered quantity).

8.Whether there is price match making facility for procurement from MSEs over large scale?

In tender, participating MSEs quoting price within band of L1+15% shall also be allowed to supply a portion of requirement by bringing down their price to L1 price in a situation where L1 price is from someone other than an MSE. Such MSEs shall be allowed to supply up to 20% of total tendered value. In case of more than one such MSE, the supply will be shared proportionately (to tendered quantity).

9.What steps are to be taken by the Government Ministries / Departments / CPSUs to develop MSE Vendors to achieve their targets for MSE procurement?

Central Ministries/Departments /PSUs must take necessary steps to develop appropriate vendors by organizing Vendor Development Programmes /Buyer-Seller Meets and entering into Rate Contract with MSEs for a specified period in respect of

periodic requirements.

Under the Procurement and Marketing Support scheme, State Level VDP and National Level VDPs are regularly organized by the Ministry to develop suitable MSE vendors.

10.What steps are to be taken by the Government Ministries / Departments / CPSUs to develop vendors from MSEs owned by SC/ST entrepreneurs?

For enhancing participation of MSEs owned by SCs / STs in Government procurement, Central Government Ministries / Departments / PSUs have to take following steps:

Special Vendor Development Programmes/ Buyer-Seller Meets would be conducted by Departments/ CPSUs for SC/STs

Outreach programmes will be conducted by NSIC to cover more and more MSEs from SC/STs under its schemes of consortia formation; and

NSIC would open a special window for SCs / STs under its Single Point

Registration Scheme (SPRS).

A National SC/ST hub scheme has been launched in October 2016, for providing handholding support to SC/ST entrepreneur. which is being coordinated / implemented by the National Small Industries Corporation (NSIC) under this Ministry

11.What are the other benefits/ facilities to the MSEs available under the Policy?

To reduce transaction cost of doing business, MSEs will be facilitated by providing them tender sets free of cost, exempting MSEs from payment of earnest money, adopting e-procurement to bring in transparency in tendering process.

In addition to benefits mention above MSEs are also given relaxation in prior turn over and prior experience criteria without compromising in quality and technical specification of products or services.

12. Whether there is any review mechanism for monitoring and review of the Policy?

A Review Committee has been constituted under chairmanship of Secretary, Ministry of MSME for monitoring and review of Public Procurement Policy for MSEs. M/o MSME will review and/or modify the composition of the Committee as and when required. This Committee will, inter alia, review list of 358 items reserved for exclusive purchase from MSEs on a continuous basis, consider requests from Government Departments, CPSUs for exemption from 25% target on a case to case basis and monitor achievements under the Policy.

13. Whether there is any kind of purchases that have been kept out of the purview of the Procurements under the Policy and if yes, how monitoring of the goal set will be done?

Given their unique nature, Defense armament imports will not be included in computing 25% goal for Ministry of Defense. In addition, Defense Equipment like weapon systems, missiles, etc. will remain out of purview of such policy of reservation. Monitoring of goals set under the policy will be done, in so far as they relate to the Defense sector, by Ministry of Defense itself in accordance with suitable procedures to be established by them.

14. From where the detail of the Policy can be obtained?

Policy details are available on the website of this office- http://dcmsme.gov.in.

15.Whether this Policy is mandatory under any Act?

Yes, The Policy is mandatory and notified under the MSMED Act,2006.

16.How many items are reserved for exclusive purchase from MSEs?

There are 358 items reserved for exclusive purchase from MSE Sector.

17.Whether this policy is applicable for works / trading activities also?

Policy is meant for procurement of only goods produced and services rendered by MSEs. However, traders are excluded from the purview of Public Procurement Policy.

18.Whether policy is applicable for MSEs registered with NSIC?

The policy is also applicable for MSEs registered with NSIC.

19.Whether policy provides benefits for exemption from Security Deposits to MSEs?

No, there is no exemption on security deposit/performance guaranty under the PPP.

20.Whether MSE quoting price within price band L1 + 15 % could be given complete supply to tender in case tender item is non-splitable / non-dividable?

In case of tender item is non-splitable or non-dividable, etc. MSE quoting price within price band L1+15% may be awarded for full/ complete supply of total tendered value to MSE, considering spirit of policy for enhancing the Govt. procurement from MSE.

21.Which are MSEs owned by SC / ST enterprises?

Definition of MSEs owned by SC / ST is as given under:

In case of proprietary MSE, proprietor(s) shall be SC /ST.

In case of partnership MSE, the SC / ST partners shall be holding at least 51% shares in the unit.

In case of Private Limited Companies, at least 51% share shall be held by SC / ST promoters.

22.Whether Government Ministries / Departments / CPSUs those have meager value of total procurement may be exempted from policy?

Policy is applicable to all the Govt. Ministries / Departments / CPSUs in irrespective of volume and nature of procurement.

23.Whether policy has provision for exemption from 20% percentage procurement target?

The Review Committee may consider any request of Ministries / Departments / CPSUs for exemption from present25%procurement targets on case to case basis

1. What is Bank Credit Facilitation Scheme?

To meet the credit requirements of MSME units NSIC has entered into a Memorandum of Understanding with various Nationalized and Private Sector Banks. Through syndication with these banks, NSIC arranges for credit support (fund or non fund based limits) from banks.

2. What are the Salient features of Bank Credit Facilitation Scheme?

  • Facilitates credit to MSMEs by having an integrated mix of various public and private sector banks
  • Provides an option for MSMEs to apply for a new bank or switch over of an account to a different bank
  • Helps the MSMEs in completing documentation and thereafter submitting it to the bank
  • Helps the MSMEs in getting liberal rate of interests from the banks after a favourable rating is awarded to unit under Performance and Credit rating scheme of the Ministry.
  • To facilitate larger number of MSMEs who are desirous of availing credit
  • To provide handholding support to MSMEs.

3. How MSME loans can be availed under Bank Credit Facilitation Scheme ?

The MSME Unit can approach directly to any of our branch offices and submit their request for loan requirement from any of the banks under our tie up agreement. The official sitting at the branch will provide hand holding support to the MSME unit by assisting them in completing all documentation as required for further submission to the bank.

4. What are these Documents?

These documents are to be provided by the MSME unit based on the checklist of the banks.

5. What are the target clients who can avail loan under NSIC-FFC?

Existing MSME units as well as units applying for fresh loans can apply through this portal

6. Is there any cost for applying in this scheme?

No fee is charged from the MSME unit for applying for loan under this scheme.

7. How does this Bank Credit Facilitation Scheme help MSME ?

Under Bank Credit Facilitation Scheme ,the MSME(s) can get access to finance from banks based upon their lending policy and a focused attention is given to the credit proposals sponsored by NSIC.

8. Which are the lending institutions eligible for extending loans under FFCs?

The Banks/FI(s) which have entered into Memorandum of Understanding (MOU) with NSIC are the lending institutions under FFCs.

9. What are the types of loan facilities available in Bank for Micro, Small and Medium Enterprises?

  • Term loans for acquisition of fixed assets (viz, land/building, plant/machinery, other fixed assets) towards setting up of new units and for expansion, modernization and diversification in case of existing units.
  • Working Capital limits to meet the working capital needs of the MSME units in the form of open cash credit, overdraft against book debts and bill discounting facility.

Non fund based limits such as guarantees, letter of credit, foreign bank guarantees, foreign letter of credit etc.

10. Whether KYC compliance is mandatory for availing loans under MSME?

Yes, the loan applicants should open an operative account (Savings /Current Bank Account) which is KYC compliant with proper introduction, address proof, ID proof and photo etc; as stipulated by the bank.

11. What are all the documents to be submitted for availing loans under MSME?

The documents to be submitted vary based on the purpose of the loan.

The general documents as required are:-

  • Proof of Identity
  • Proof of Residence
  • Proof of Business address
  • Asset and Liability Statement of promoters, guarantors, directors etc. with latest income tax returns.
  • Rent Agreement / Lease Deed if business premises rented/leased.
  • Copy of SSI registration certificate/Entrepreneur’s Memorandum
  • Profile of the Unit (Name and address of promoters, experience, nature of activity, address of all offices/plants, share holding pattern etc.)
  • Last three year’s Balance Sheet with IT/ST returns
  • Projected Balance Sheet for next two years
  • Application in the prescribed format
  • CMA data in the prescribed format if limit required is Rs. 100 lakh and above.
  • Position of accounts with existing bankers
  • Project Report for term loan requirements
  • Estimates/Quotations/Sanctioned building plan etc.
  • Partnership Deed/Trust Deed/Rules & Bye laws/Memorandum and Articles of Association /Certificate of Incorporation etc.
  • Clearance from Pollution Control Board/Sanction from Electricity Board and other statutory authorities
  • Month-wise production and sales data for the current financial year, value of stock in process, finished goods, debtors, creditors etc.

12. What are the margin norms for loans under MSME?

Varies from bank to bank

13. What is the interest rate of MSME lo

Varies from bank to bank

14. What are the processing charges payable for MSME loans?

Varies from bank to bank

15. What are the security norms for MSME loans?

Varies from bank to bank

16. What is the method of assessing working capital requirement for MSME unit?

For units requiring working capital limits up to Rs. 5 crore, requirement is assessed as 25% of the projected turnover for the next year and the working capital limit shall be 20% of the projected turnover. The balance shall be brought by promoters as their contribution by way of equity / lo

For limits above Rs. 5 crore, the working capital requirement is assessed under Maximum Permissible Bank Finance Method. It may also vary from bank to bank.

17. What is the repayment period stipulated for term loans?

The repayment period varies depending upon the income generation from the unit and generally varies from 5-7 years. However, in exceptional cases it can go to 11 years.

18. How is working capital finance typically structured at bank?

At bank, working capital loans are tailored to suit the precise requirements of the client, in any of the various instruments available or structured as a combination of cash credit, demand loan, bill financing and non-funded facilities.

The banks accomplished credit crew can gauge the credit needs of each client and frame the exact solutions.

19. How does bank approve working capital loans?

Bank dedicated credit team has a deep understanding of the intricacies of various industries and is richly experienced in reckoning the business potential of companies.

These informed professionals can assess your specific credit requirements and tailor customized financial solutions to suit your risk profile and the working capital cycle of your company.

20.What is the repayment schedule like?

Working capital finance limits are normally valid for one year and repayable on demand. Specific, self-liquidating loans are linked to the natural tenor of the transaction (bill finance, export credit etc.).

21.What is meant by Priority Sector Lending?

Priority sector lending include only those sectors, as part of the priority sector that impact large sections of the population, the weaker sections and the sectors which are employment-intensive such as agriculture, and Micro and Small enterprises. Detailed guidelines on Priority sector lending are available in RBI Master Circular on Priority sector lending no. RPCD.CO.Plan.BC 9 /04.09.01/2013-14 dated July 1, 2013 . The Master circulars issued by RBI, to banks, on various matters are available on its website www.rbi.org.in and updated in July each year.

22.Are there any targets prescribed for lending by banks to MSMEs?

As per extant policy, certain targets have been prescribed for banks for lending to the Micro and Small enterprise (MSE) sector. In terms of the recommendations of the Prime Minister’s Task Force on MSMEs banks have been advised to achieve a 20 per cent year-on-year growth in credit to micro and small enterprises, a 10 per cent annual growth in the number of micro enterprise accounts and 60% of total lending to MSE sector as on preceding March 31st to Micro enterprises.

In order to ensure that sufficient credit is available to micro enterprises within the MSE sector, banks should ensure that:

40 per cent of the total advances to MSE sector should go to micro (manufacturing) enterprises having investment in plant and machinery up to Rs. 10 lakh and micro (service) enterprises having investment in equipment up to Rs. 4 lakh ; 20 per cent of the total advances to MSE sector should go to micro (manufacturing) enterprises with investment in plant and machinery above Rs. 10 lakh and up to Rs. 25 lakh, and micro (service) enterprises with investment in equipment above Rs. 4 lakh and up to Rs. 10 lakh. Thus, 60 per cent of MSE advances should go to the micro enterprises.

For details, the RBI Master Circular RPCD.MSME & FS.BC.No.5/06.02.31/2013-14 dated July 1, 2013 on 'Lending to Micro, Small and Medium Enterprises (MSME) Sector, may please be seen.

23. How many such specialized branches for lending to MSMEs are there?

As on March 2013 there are 2032 specialized MSME branches.

24. Are there specialized bank branches for lending to the MSMEs?

Public sector banks have been advised to open at least one specialized branch in each district. The banks have been permitted to categorize their MSME general banking branches having 60% or more of their advances to MSME sector, as specialized MSME branches for providing better service to this sector as a whole.

As per the policy package announced by the Government of India for stepping up credit to MSME sector, the public sector banks will ensure specialized MSME branches in identified clusters/centres with preponderance of small enterprises to enable the entrepreneurs to have easy access to the bank credit and to equip bank personnel to develop requisite expertise.

Though their core competence will be utilized for extending finance and other services to MSME sector, they will have operational flexibility to extend finance/render other services to other sectors/borrowers.

25. How do banks assess the working capital requirements of borrowers?

The banks have been advised by RBI to put in place loan policies governing extension of credit facilities for the MSE sector duly approved by their Board of Directors Vide RBI circular; RPCD.SME & FS.BC.No.102/06.04.01/2008-09 dated May 4, 2009 ).

Banks have, however, been advised to sanction limits after proper appraisal of the genuine working capital requirements of the borrowers keeping in mind their business cycle and short term credit requirement. As per Nayak Committee Report, working capital limits to SSI units is computed on the basis of minimum 20% of their estimated turnover up to credit limit of Rs. 5 crore. For more details paragraph 4.12.2 of the RBI Master Circular on lending to the MSME sector dated July 1, 2010 may please be seen.

26. Is there any provision for grant of composite loans by banks?

A composite loan limit of Rs.1 crore can be sanctioned by banks to enable the MSME entrepreneurs to avail of their working capital and term loan requirement through Single Window in terms of RBI Master Circular on lending to the MSME sector dated July 1, 2010. All scheduled commercial banks have been advised by our circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 on May 4, 2009 that the banks which have sanctioned term loan singly or jointly must also sanction working capital (WC) limit singly (or jointly, in the ratio of term loan) to avoid delay in commencement of commercial production thereby ensuring that there are no cases where term loan has been sanctioned and working capital facilities are yet to be sanctioned. These instructions have been reiterated to schedule commercial banks on March 11, 2010.

27. What is Cluster financing?

Cluster based approach to lending is intended to provide a full-service approach to cater to the diverse needs of the MSE sector which may be achieved through extending banking services to recognized MSE clusters. A cluster based approach may be more beneficial

(a) In dealing with well-defined and recognized groups
(b) Availability of appropriate information for risk assessment
(c) Monitoring by the lending institutions and
(d) reduction in costs.

The banks have, therefore, been advised to treat it as a thrust area and increasingly adopt the same for SME financing. United Nations Industrial Development Organisation (UNIDO) has identified 388 clusters spread over 21 states in various parts of the country. The Ministry of Micro, Small and Medium Enterprises has also approved a list of clusters under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) and Micro and Small Enterprises Cluster Development Programme (MSE-CDP) located in 121 Minority Concentration Districts. Accordingly, banks have been advised to take appropriate measures to improve the credit flow to the identified clusters.

Banks have also been advised that they should open more MSE focused branch offices at different MSE clusters which can also act as counseling.

Centres for MSEs. Each lead bank of the district may adopt at least one cluster (Refer circular RPCD.SME & NFS.No.BC.90/06.02.31/2009-10 dated June 29, 2010 )

28. What are the RBI guidelines on interest rates for loans disbursed by the commercial banks?

As part of the financial sector liberalization, all credit related matters of banks including charging of interest have been deregulated by RBI and are governed by the banks' own lending policies.

With a view to enhancing transparency in lending rates of banks and enabling better assessment of transmission of monetary policy, all scheduled commercial banks had been advised in terms of RBI circular;

DBOD.No.Dir.BC.88/13.03.00/2009-10on April 9, 2010 to introduce the Base Rate system w.e.f. July 1, 2010. Accordingly, the Base Rate System has replaced the BPLR (Bank’s prime Lending Rate) system with effect from July 1, 2010. All categories of loans should henceforth be priced only with reference to the Base Rate.

30. What is debt restructuring of advances?

A viable/potentially viable unit may apply for a debt restructuring if it shows early stage of stickiness. In such cases the banks may consider to reschedule the debt for repayment, consider additional funds etc. A debt restructuring mechanism for units in MSME sector has been formulated and advised to all commercial banks. The detailed guidelines have been issued to ensure restructuring of debt of all eligible small and medium enterprises. Prudential guidelines on restructuring of advances have also been issued which harmony the prudential norms over all categories of debt restructuring mechanisms (other than those restructured on account of natural calamities).

The relevant circulars in this regard are circular DBOD.BP.BC.No.34/21.04.132/2005-06 dated September 8, 2005 and circular DBOD.No.BP.BC.37/21.04.132/2008-09 dated August 27, 2008 which are available on our website www.rbi.org.in

31. What is the definition of a sick unit?

As per the extant guidelines, a Micro or Small Enterprise (as defined in the MSMED Act 2006) may be said to have become Sick, if

Any of the borrower account of the enterprise remains NPA for three months or more.

OR

There is erosion in the net worth due to accumulated losses to the extent of 50% of its net worth during the previous accounting year. This criterion enables banks to detect sickness at an early stage and facilitate corrective action for revival of the unit.

32. Are all sick units put under rehabilitation by banks?

No. If a sick unit is found potentially viable it can be rehabilitated by the banks. The viability of the unit is decided by banks. A unit should be declared unviable only if such a status is evidenced by a viability study.

33. Is there a time frame within which the banks are required to implement the rehabilitation package?

Viable / potentially viable MSE units/enterprises, which turn sick in spite of debt re-structuring, would need to be rehabilitated and put under nursing. It will be for the banks/financial institutions to decide whether a sick MSE unit is potentially viable or not. The rehabilitation package should be fully implemented by banks within six months from the date the unit is declared as potentially viable/viable. During this six months period of identifying and implementing rehabilitation package banks/FIs are required to do “holding operation” which will allow the sick unit to draw funds from the cash credit account at least to the extent of deposit of sale proceeds. The relevant circular on rehabilitation of sick units is RPCD.CO.MSME & NFS.BC.40/06.02.31/2012-2013 dated November 1, 2012 is available on our website.

34. What is the procedure and time frame for conducting the viability study?

The decision on viability of the unit should be taken at the earliest but not later than 3 months of the unit becoming sick under any circumstances. The following procedure should be adopted by the banks before declaring any unit as unviable:

A unit should be declared unviable only if the viability status is evidenced by a viability study. However, it may not be feasible to conduct viability study in very small units and will only increase paperwork. As such for micro (manufacturing) enterprises, having investment in plant and machinery up to Rs. 5 lakh and micro (service) enterprises having investment in equipment up to Rs. 2 lakh, the Branch Manager may take a decision on viability and record the same, along with the justification.

The declaration of the unit as unviable, as evidenced by the viability study, should have the approval of the next higher authority/ present sanctioning authority for both micro and small units. In case such a unit is declared unviable, an opportunity should be given to the unit to present the case before the next higher authority. The modalities for presenting the case to the next higher authority may be worked out by the banks in terms of their Board approved policies in this regard the next higher authority should take such decision only after giving an opportunity to the promoters of the unit to present their case. For sick units declared unviable, with credit facilities of Rs. 1 crore and above, a Committee approach may be adopted.

A Committee comprising of senior officials of the bank may examine such proposals. This is expected to improve the quality of decisions as collective wisdom of the members shall be utilized, especially while taking decision on rehabilitation proposals. The final decision should be communicated to the promoters in writing. The above process should be completed in a time bound manner and should not take more than 3 months.

35. What are the RBI guidelines on One Time Settlement scheme (OTS) for MSEs for settlement of their NPAs?

Scheduled commercial banks have been advised in terms of our circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 dated May 4, 2009 to put in place a non -discretionary one time Settlement scheme duly approved by their Boards. The banks have also been advised to give adequate publicity to their OTS policies. (Refer circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 dated May 4, 2009)

36. Apart from the loans and other banking facilities, do the banks provide any guidance to MSE entrepreneurs?

Banks provide following services to the MSE entrepreneurs:

Rural Self Employment Training Institutes (RSETIs)

At the initiative of the Ministry of Rural Development (MoRD), Rural Self Employment Training Institutes (RSETIs) have been set up by various banks all over the country. These RSETIs are managed by banks with active co-operation from the Government of India and State Governments. RSETIs conduct various short duration (ranging preferably from 1 to 6 weeks) skill upgradation programmes to help the existing entrepreneurs compete in this ever-changing global market. RSETIs ensure that a list of candidates trained by them is sent to all bank branches of the area and co-ordinate with them for grant of financial assistance under any Govt. sponsored scheme or direct lending.

Financial Literacy and consultancy support:

Banks have been advised to either separately set up special cells at their branches, or vertically integrate this function in the Financial Literacy Centres (FLCs) set up by them, as per their comparative advantage. Through these FLCs, banks provide assistance to the MSE entrepreneurs in regard to financial literacy, operational skills, including accounting and finance, business planning etc. (Refer circular RPCD.MSME & NFS.BC.No.20/06.02.31/2012-13 dated August 1, 2012)

Further, with a view to providing a guide for the new entrepreneurs in this sector, a booklet titled “Nurturing Dreams, Empowering Enterprises – Financing needs of Micro and Small Enterprises – A guide” has been launched on August 6, 2013 by the Reserve Bank. The booklet has been placed on our website www.rbi.org.in under the following path & URL:

RBI main page – Financial Education – Downloads – For Entrepreneurs (http://rbi.org.in/financialeducation/FinancialEnterprenure.aspx)

37. Can the MSE borrowers get collateral free loans from banks?

In terms of RBI circular RPCD.SME&NFS.BC.No.79/06.02.31/2009-10 dated May 6, 2010, banks are mandated not to accept collateral security in the case of loans upto Rs 10 lakh extended to units in the MSE sector. Further, in terms of RBI circular RPCD/PLNFS/BC.No.39/06.02.80/2002-04 dated November 3, 2003, banks may, on the basis of good track record and financial position of MSE units, increase the limit of dispensation of collateral requirement for loans up to Rs.25 lakh with the approval of the appropriate authority.

All scheduled commercial banks that are public/private sector banks and RRbs/NSIC/SIDBI/NETFI are the member lending institutions. (MLI) List of banks offering loans is mentioned below -

List of Bank's MSME Care Centres

Sr. No Name of Bank
1 Allahabad Bank
2 Bank of Baroda
3 O.B.C.
4 Andhra Bank
5 State Bank of Bikaner & Jaipur
6 State Bank of Hyderabad
7 Bank of India
8 Bank of Maharashtra
9 State Bank of Travancore
10 Canara Bank
11 Dena Bank
12 Dena Bank
13 Indian Bank
14 I.O.B.
15 Punjab & Sind Bank
16 P.N.B.
17 Syndicate Bank
18 UCO Bank
19 Union Bank of India
20 United Bank of India
21 Vijaya Bank
22 State Bank of Mysore
23 Corporation Bank
24 I.D.B.I.
25 State Bank of Patiala
26 State Bank of India
27 Central Bank of India
28 State Bank of Indore

Links of State Level Bankers’ Committees contact address

Sr. No Name of Bank
1 SLBC Rajasthan
2 SLBC Bihar
3 SLBC U.P.
4 SLBC Orissa
5 SLBC Andhra Pradesh
6 SLBC J&K
7 SLBC Gujarat
8 SLBC West Bengal
9 SLBC Kerala
10 SLBC Jharkhand
11 SLBC Himachal Pradesh

1. What is Bank Credit Facilitation Scheme?

To meet the credit requirements of MSME units NSIC has entered into a Memorandum of Understanding with various Nationalized and Private Sector Banks. Through syndication with these banks, NSIC arranges for credit support (fund or non fund based limits) from banks.

1. What is Trade Receivables Discounting System (TReDS)?

The objective of TReDS is to create Electronic Bill Factoring Exchanges which could electronically accept and settle bills so that MSMEs could encash their receivables without delay. This will not only give them greater access to finance but will also put greater discipline on corporates to pay their dues on time. For more details you may refer to RBI guidelines for setting up and operating TReDS on their website https://www.m1xchange.com/treds.php

2. Who are the participants in TReDS?

Sellers, buyers and financiers are the participants on a TReDS platform.

3. Who can participate as a seller in TReDS?

Only MSMEs can participate as sellers in TReDS.

4. Who can participate as a buyer in TReDS?

Corporates, Government Departments, PSUs and any other entity can participate as buyers in TReDS.

5. Who can participate as a financier in TReDS?

Banks, NBFC - Factors and other financial institutions as permitted by the Reserve Bank of India (RBI), can participate as financiers in TReDS.

6. How does TReDS work?

Broadly, following steps take place during financing / discounting through TReDS: Creation of a Factoring Unit (FU) - standard nomenclature used in TReDS for invoice(s) or bill(s) of exchange - containing details of invoices / bills of exchange (evidencing sale of goods / services by the MSME sellers to the buyers) on TReDS platform by the MSME seller (in case of factoring) or the buyer (in case of reverse factoring); Acceptance of the FU by the counterparty - buyer or the seller, as the case may be; Bidding by financiers; Selection of best bid by the seller or the buyer, as the case may be; Payment made by the financier (of the selected bid) to the MSME seller at the agreed rate of financing / discounting; Payment by the buyer to the financier on the due date.

7. What is a Factoring Unit (FU)?

A Factoring Unit (FU) is a standard nomenclature used in TReDS for invoice(s) or bill(s) of exchange. Each FU represents a confirmed obligation of the corporates or other buyers, including Government Departments and PSUs.

8. Who can create a FU?

In TReDS, FU can be created either by the MSME seller or the buyer. If MSME seller creates it, the process is called factoring; if the same is created by corporates or other buyers, it is called as reverse factoring.

9. Whether TReDS could deal with reverse factoring?

Yes. The TReDS could deal with both receivables factoring as well as reverse factoring.

10. Whether the MSME seller would have to pay to the financier in case the buyer defaults in repayment?

No. The transactions processed under TReDS are "without recourse" to the MSMEs.

11. Whether any authorization is required to set up and operate a TReDS platform?

Yes, authorization is required to be obtained from RBI under the Payment and Settlement Systems (PSS) Act, 2007.

12. What is the eligibility criteria for setting up and operating TReDS?

Eligibility criteria for the purpose of setting up and operating a TReDS platform is provided in the guidelines (as amended from time to time) for TReDS issued by RBI. These guidelines are available at the following path: www.rbi.org.in →"Payment and Settlement Systems" dropdown →"Guidelines". RBI's Press Release dated October 15, 2019 may also be read in this regard. The same can be accessed at the following web links: Click here and Click here

13. Where can I find the details of TReDS entities authorised by RBI?

List of all authorized Payment System Operators (PSOs), including TReDS, is available at the following path: www.rbi.org.in →"Payment and Settlement Systems" dropdown →"Information Useful to Customer"→"List of Authorised Entities – Payment System Operators".

14. Whether TReDS entities undertake KYC (Know Your Customer) of participants?

Yes. The KYC process adopted by the TReDS entities shall adhere to the "Master Direction – Know Your Customer (KYC) Direction, 2016" dated February 25, 2016 (as amended from time to time) issued by RBI.

15. What is a settlement file and who generates it in TReDS?

A settlement file provides information as to how much amount has to be debited from and credited to the accounts of participants (sellers, buyers and financiers), due on a date / time. In other words, it indicates how much a financier has to pay to an MSME seller, and how much a buyer owes to the financier on a date / time. The TReDS entities generate the settlement file and send the same to existing payment systems (for instance, National Automated Clearing House) for actual payment of funds.

16. Whether defaults on TReDS platform are the responsibility of TReDS entities?

No. Default handling is outside the purview of TReDS platforms.

The policy is applicable with effect from 1.4.2012. However, the policy has become mandatory with effect from 1.4.2015 onwards.

The Policy rests upon core principles of competitiveness, adhering to sound procurement practices and execution of orders for supply of goods and services in accordance with a system which is fair, equitable, transparent, competitive and cost effective.

As per Gazette Notification (S.O. 5670(E)dated 8th November,2018, It is mandatory for all CPSEs to procure at least 25% of their annual procurement from MSEs including 4% from MSEs owned by SC/ST entrepreneur and 3% from MSEs owned by women entrepreneur.

1. How can I apply for Curfew/Movement/Emergency Pass during COVID-19 lockdown?

To regulate the movement of goods and people during the COVID-19 lockdown period, advisory has been issued by many State Governments to procure 'curfew/e-passes' for vehicles and individuals. More details can be found at the respective websites of your states.

2. What all special provisions have been made for transportation of commodities during COVID -19 situation?

For nationwide transportation of essential commodities and other goods, Ministry of Railways has introduced unhindered services of Special Parcel Trains. The details of Parcel Special Trains can be found at below link:

https://enquiry.indianrail.gov.in/mntes/q?opt=TrainRunning&subOpt=splTrnDtl

1. In view of COVID-19 outbreak, what measures have been taken with respect to statutory and regularity compliances?

Finance Minister announces several relief measures relating to Statutory and Regulatory compliance matters across Sectors in view of COVID-19 outbreak including:

No Late Fees on any Filings made from 1st April 2020 to 30th September 2020 (irrespective of the due date of the filing)

Maximum Interval between two board meetings shall be extended by 60 days for the next two quarters. (Up to 30th September 2020).

Newly incorporated companies are required to file a declaration for Commencement of Business within 6 months of incorporation. An additional time of 6 more months shall be allowed.

Every Company is required to have at least one resident director. Such a requirement has been relaxed (Until further notice) For further details please visit www.dcmsme.gov.in

1. What support is provided by the Ministry for enabling MSMEs to get credit rating?

The Ministry is implementing the Performance & Credit Rating Scheme, the main objective of the scheme is to provide a trusted third party opinion on the capabilities and creditworthiness of the MSEs so as to create awareness amongst them about the strengths and weakness of their existing operations.

This is to provide them an opportunity to improve and enhance their organizational strengths and credit worthiness, so that they can access credit at cheaper rates and on easy terms. NSIC was appointed as nodal agency to implement the scheme on behalf of the Government. Rating under the scheme is being carried out through empaneled rating agencies i.e. Credit Rating Information Services of India Limited (CRISIL), Credit Analysis & Research Limited (CARE), Onicra Credit Rating Agency of India Ltd. (ONICRA), Small and Medium Enterprises Rating Agency of India Ltd. (SMERA), ICRA limited and Brickwork India Ratings. Under this Scheme, rating fee payable by the micro and small enterprises is subsidized for the first year only and that is subject to maximum of 75% of the fee or Rs. 40000/-, whichever is less.

2. What is eligibility criteria for Scheme for Technology Acquisition?

Credit rating is not mandatory but it is in the interest of the MSE borrowers to get their credit rating done as it would help in credit pricing that is cost of funds (interest and other charges etc.) of the loans taken by them from banks.

3. Who can avail the benefits of these schemes?

With a view to facilitating credit flow to the MSME sector and enhancing the comfort-level of the lending institutions, the credit rating of MSME units done by reputed credit rating agencies and it should be encouraged. Banks are advised to consider these ratings as per availability and wherever appropriate structure their rates of interest depending on the ratings assigned to the borrowing SME units.

1. Is there any time limit for the Scheme for Technology Acquisition by State Government?

Yes. Currently the operative period of this scheme is from 01/01/2015 to 31/12/2019 until any further changes.

2. What is eligibility criteria for Scheme for Technology Acquisition?

A new enterprise with new technology, existing enterprise will also eligible for new product or for improvement of production process, Such MSMEs intending to acquire technology for a specific product/ process.

3. Who can avail the benefits of these schemes?

Any MSME registered unit.

4. What is the mechanism for disbursement of assistance to the unit for Scheme for Technology Acquisition?

The assistance is provided in form of re-imbursement after submission of all the related expense details with supporting.

5. Are these schemes limited to specific sectors only for Scheme for Technology Acquisition?

No. These schemes can be availed by any unit in any sector subject to approval. Further, no assistance is given for purchase of plant and machinery or equipment under this scheme.

6.For these schemes can units apply individually or they have to apply through any trade association / organization?

Any unit has to apply individually for these schemes.

7. Whether the Scheme is applicable for new MSME registered units?

Yes.

1. What is eligibility criteria for the Scheme?

The eligibility criteria are as follows:

  • The Enterprise registered as MSME.
  • For setting up new enterprise and such enterprise has to commence production during the operative period.
  • For carrying out expansion or diversification by existing enterprise with investment in fixed capital more than 50% of its existing gross fixed capital investment However, such investment should be minimum 60% only in plant and machinery.
  • For carrying out Modernization of existing unit with investment in plant –machinery and equipment by more than 25% of its existing gross fixed capital investment, such modernization should be carried out by way of adopting new technology/ production process and/or improving quality of products.
  • Only one expansion/diversification and one modernization during operative period is eligible to new unit set up during operative period of the scheme.
  • Old & second hand machinery will not be eligible for assistance.

2. Is there any time limit for the Scheme?

Yes. Currently the operative period of this scheme is from 01/01/2015 to 31/12/2019 until any further changes.

3. Are these schemes limited to specific sectors only?

No. These schemes can be availed by any unit in any sector subject to approval.

4. Are there any conditions applicable to this scheme?

Conditions for Capital Investment Subsidy

  • Enterprise which has obtained first disbursement during the operative period of the scheme will eligible for the assistance.
  • In case term loan is sanctioned after one year from the date of commencement of commercial production, such enterprise will not eligible for subsidy under the scheme.
  • The Unit shall have to continue production at least for 5 years from the date of commencement of commercial production, and if, it fails to do so than subsidy already been disbursed will be recovered as land revenue arrears.
  • Total quantum of Capital Subsidy (State + Central) in any case shall not exceed the total loan amount disbursed by the bank/Financial Institutes.

Conditions for Interest Subsidy

  • Enterprise shall have option for date of availment of interest subsidy either from the date of first disbursement of the loan or from the date of commencement of commercial production. This opted date will be final and period of 5 year will start from that date.
  • The interest subsidy will be reimbursed to the enterprise who pays regular installments and interest thereof to the financial institution. If the enterprise becomes defaulter for any period, it will not be eligible for reimbursement of interest subsidy for that default period.
  • In case term loan is sanctioned after one year from the date of commencement of commercial production, such enterprise will not eligible for Interest subsidy under the scheme.
  • Total quantum of Interest Subsidy (State + Central) in any case shall not exceed the total loan amount disbursed by the bank/Financial Institutes.

**For other conditions and information's, refer to the scheme details available on http://ic.gujarat.gov.in/?page_id=3776

5. What is the mechanism for disbursement of assistance to the unit for Scheme for Technology Acquisition?

The assistance is generally provided in form of deduction from the outstanding loan amount at the end of the tenure of repayment. However, the policies of different banks may be different for adjustment of subsidy amount for either Capital Investment subsidy or Interest Subsidy.

6. For this scheme can units apply individually or they have to apply through any trade association / organization?

MSME unit has to apply individually for this scheme.

7. Where to apply for availing benefits of this scheme?

District Industries Center (DIC).

8. Can both manufacturing and service provider units apply for this scheme?

No. This scheme is only available for the manufacturing units registered under MSME.

1. What is the assistance provided under this scheme?

50% of rent paid or Rs. 50000/- whichever is less for units situated in Municipal corporation areas or areas falling under urban development authority. For others, the assistance is 50% of rent paid or Rs. 25000/- whichever is less.

2. Who can avail the benefits of this scheme?

Any micro and small manufacturing unit registered under MSME. Units registered under Medium category and service providers cannot take assistance under this scheme.

3. For how many years the assistance is available to a unit under this scheme?

Assistance is available for maximum of 3 years under this scheme.

4. What is the mechanism for disbursement of assistance to the unit?

The assistance is provided in form of re-imbursement after submission of all the details with supporting.

5. Whether the Scheme is applicable for new MSME registered units?

Yes.

For further details on below queries, you may please visit www.dcmsme.gov.in or GJEPC's website https://www.gjepc.org

Existing Schemes