Micro, Small and Medium Enterprises Development Act, 2006

The Ministry of Micro, Small and Medium Enterprises (MSME) Act was introduced to promote the growth and development of small businesses in India. The act provides various incentives and benefits to small businesses, including easier access to credit, financial assistance, and subsidies. In this article, we will take a comprehensive look at the MSME Act, its benefits for small businesses, and how you can leverage it to grow your business.

Key features of Budget 2025-26 for MSMEs (February 2025)

The Union Budget for 2025-26 introduces several measures to bolster India's Micro, Small, and Medium Enterprises (MSMEs):

• Revised Investment and turnover limits: The investment and turnover thresholds for MSMEs will be updated, with investment limits increasing by 2.5 times and turnover limits by 2 times

Updated limits for different enterprise types

• Credit Guarantee for MSMEs: The credit guarantee cover for micro and small enterprises has been increased from Rs. 5 crore to Rs. 10 crore, unlocking an additional Rs. 1.5 lakh crore in credit over the next 5 years
• Startups: The credit guarantee cover for startups has been raised from Rs. 10 crore to Rs. 20 crore, with a reduced 1% guarantee fee for loans in 27 priority sectors under Atma Nirbhar Bharat
• Exporter MSMEs: The term loan guarantee cover for established exporters has been increased to Rs. 20 crore

Additional measures for MSMEs in budget 2025

• Credit cards for micro enterprises: Customised credit cards with a Rs. 5 lakh limit will be provided to micro enterprises registered on the Udyam portal, with a target of issuing 10 lakh cards in the first year
• Startup fund of funds: The Alternate Investment Funds (AIFs) for startups, with a total commitment of Rs. 91,000 crore, will be further supported by an additional Rs. 10,000 crore Fund of Funds to expand its scope
• Support for first-time entrepreneurs: A new initiative will provide term loans of up to Rs. 2 crore over the next five years to 5 lakh first-time entrepreneurs, including women, SCs, and STs

Understanding the MSME Act

The MSME Act was introduced in 2006 with the aim of providing support to micro, small, and medium-sized enterprises in India. Designed to promote, facilitate, and develop the competitiveness of micro, small, and medium enterprises, the MSME Act opens up a world of possibilities for budding entrepreneurs. It classifies businesses based on their investment in plant and machinery or equipment, enabling them to avail various benefits and concessions.

The MSME Act not only provides financial benefits but also integrates businesses into a supportive ecosystem. Entrepreneurs can leverage networking opportunities, skill development programs, and government incentives to propel their ventures forward.

Who is eligible for MSME benefits?

To be eligible for MSME benefits, your business must meet certain criteria, including:

• Your business must fall under the micro, small, or medium-sized enterprise category based on the investment in plant and machinery or equipment.
• Your business must be registered with the relevant authorities.

Here are some of the benefits of the MSME Act:

1. Procurement preferences: The act allows for procurement preferences for MSMEs, giving small businesses an advantage in government procurement processes.
2. Marketing assistance: Small businesses can benefit from marketing assistance under the MSME Act, including support to participate in domestic and international trade fairs.
3. Technology upgradation: The MSME Act provides support to small businesses for technology upgradation and modernisation to improve productivity and competitiveness.
4. Easier access to credit: The MSME Act provides easier access to credit for small businesses by offering collateral-free loans and reducing the interest rates on loans.
5. Financial assistance: Small businesses can access various financial assistance programs under the MSME Act, including subsidies, grants, and debt restructuring.

How Bajaj Finance can support your MSME Journey

As you embark on your MSME journey, securing the necessary capital is a crucial step. Bajaj Finance understands the challenges entrepreneurs face and offers the Bajaj Finserv Business Loan as a tailored solution.

Bajaj Finance offers business loans of up to Rs. 80 lakh, ensuring that your enterprise has the necessary funds to thrive and expand. With a flexible tenure ranging from 12 months to 96 months, you can choose a repayment plan that aligns with your business goals. Rapid disbursal within 48 hours* ensures that you can seize business opportunities without delays.

Ready to propel your business to new heights? Explore the Bajaj Finserv Business Loan today and embark on a journey of success with Bajaj Finance. Secure your financial future, unlock growth opportunities, and redefine success in the vibrant landscape of MSMEs.