All About Micro Small & Medium Enterprises - One Liner

All About Micro Small & Medium Enterprises (MSME)

One Liner - Banking Key Points

• MSME stands for the Micro, Small and Medium Enterprises.
• The Ministry of Micro, Small and Medium Enterprises is the highest body which formulates and administers the rules, laws and regulation related to the “Micro, Small and Medium Enterprises” of India.
• The Minister for the Micro, Small and Medium Enterprises is Giriraj Singh.
• The “Government of India (Allocation of Business) Rules”, 1961 was amended by the President of India to create MSME.
• As per the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the Ministry of Small Scale Industries (India) and the Ministry of Agro and Rural Industries (India) were merged with each other and the Ministry of Micro, Small and Medium Enterprises was formed.
• MSME can be classified into two categories i.e. Manufacturing Enterprises and Services Enterprises.
• The Manufacturing Enterprises deal with the manufacturing or production of the goods of any industry and make the value addition of the final products. 
• The Manufacturing Enterprises are defined on the basis of the investment made on the machinery and plant.

• The Services Enterprises deal with the supply of the services.
• The Services Enterprises are defined on the basis of investments in the equipment.
• An enterprise, in which the investment in the machinery and plant is from Rs. 5 Crore to Rs. 10 Crore, is known as a Medium Enterprise.
• An enterprise, in which the investment in the machinery and plant is more than Rs. 25 Lakh - Rs. 5 Crore, is known as the Small Enterprise.
• An enterprise, in which the investment in the machinery and plant is not more than Rs. 25 Lakh, is known as the Micro Enterprise.
• An enterprise, in which the investment in the equipment is from Rs. 2 Crore to Rs. 5 Crore, is known as a Medium Enterprise.
• An enterprise, in which the investment in the equipment is more than Rs. 10 Lakh - Rs. 2 Crore, is known as the Small Enterprise.
• An enterprise, in which the investment in the equipment is from Rs. 2 Crore to Rs. 5 Crore, is known as a Medium Enterprise.
• There is at least one branch in every district which provides loan to the MSME.
• The number of specialized branched which provides loan to the MSMEs are 2887.
• The borrowers from MSME can get the “collateral free” loans of maximum amount of 25 Lakh from the banks.
• If an enterprise remains NPA (Non Performing Assets) for 3 months or more, it is called as Sick Unit MSME.
• One Time Settlement (OTS) is the option for the MSE to settle the NPAs.
• RSETI stands for Rural Self Employment Training Institutes.
• FLC stands for Financial Literacy Centers.

New Initiatives Launched by the Ministry of MSME

• Udyog Aadhaar Memorandum (UAM) – It helps to do business easily by filling the Entrepreneurs’ Memorandum with respective states and Union Territories.
• Framework to Revive and Rehabilitate the MSMEs – It identifies the incipient stress, forms committees for Distressed MSMEs, make Corrective Action Plan (CAP) discussing various options, restructures processes, makes norms on Assets Classification and provisioning and identifies the willful defaulters and the non-co-operative borrowers.
• Prime Minister’s Employment Generation Program (PMEGP) – It provides Credit-linked subsidy to form new enterprises to generate sustainable and continuous opportunities for employment in urban and rural areas.
• ASPIRE- It stands for A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship. This scheme helps to set up the network of technology and incubation centers to encourage entrepreneurship and start-ups in the agriculture and rural based industries.
• SFURTI- It stands for Scheme of Fund for Regeneration of Traditional Industries. It organizes the artisans and traditional industries into clusters and enables them to be long sustainable.
• Lean Manufacturing Competitiveness Scheme (LMCS)- This scheme increases the competitiveness to manufacture the MSMEs through various "Lean Manufacturing Techniques".
• Credit Linked Capital Subsidy Scheme (CLCSS) – It is used for Technology Up gradation by providing 15% subsidy to buy plant and machinery.
• Credit Guarantee Trust Fust for Micro and CGTMSE Scheme- It strengthens the credit delivery system and facilitates the flow of cash in the MSE sector.