MSME stands for micro, small, and medium enterprises, and the Government of India has several schemes and incentives in place to promote and support these enterprises. To avail of these benefits, businesses need to register for the MSME certificate, also known as the Udyog Aadhaar certificate. In this article, we will provide a step-by-step guide for businesses to register for the MSME certificate and its significance in getting a business loan.
Latest MSME Budget Updates in February 2025
- Revised investment limits: The investment and turnover thresholds for MSMEs will be increased by 2.5 times and 2 times, respectively
Types of enterprises and revised limits
Type of enterprise |
Revised investment limit |
Revised turnover limit |
Micro enterprises |
From Rs. 1 crore to Rs. 2.5 crore |
From Rs. 5 crore to Rs. 10 crore |
Small enterprises |
From Rs. 10 crore to Rs. 25 crore |
From Rs. 50 crore to Rs. 100 crore |
Medium enterprises |
From Rs. 50 crore to Rs. 125 crore |
From Rs. 250 crore to Rs. 500 crore |
- Micro and small enterprises: The credit guarantee cover has been increased from Rs. 5 crore to Rs. 10 crore, unlocking an additional Rs. 1.5 lakh crore in credit over the next five 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 focus sectors under Atma Nirbhar Bharat
- Exporter MSMEs: The term loan guarantee cover for well-performing exporters has been increased to Rs. 20 crore
Additional Initiatives for the MSME Sector in Budget 2025
- Credit cards for micro enterprises: Customised credit cards with a Rs. 5 lakh limit will be introduced for micro enterprises registered on the Udyam portal, with 10 lakh cards planned for issuance in the first year
- Fund of funds for startups: The Alternate Investment Funds (AIFs) for startups, with a total commitment of Rs. 91,000 crore, will be further supported by a new Rs. 10,000 crore Fund of Funds, expanding its scope
- Scheme for first-time entrepreneurs: A new scheme will assist 5 lakh first-time entrepreneurs from women, SCs, and STs, offering term loans of up to Rs. 2 crore over the next 5 years
Step-by-step guide for MSME certificate registration
The process for MSME certificate registration is straightforward and can be completed online. Here are the steps that businesses need to follow:
- Step 1: Go to the Udyam registration portal.
- Step 2: On the homepage, select the option 'For new entrepreneurs who are not registered yet as MSME or those with EM-II.'
- Step 3: Input the 'Aadhaar number' and the 'name of the entrepreneur,' then click the 'validate and generate OTP' button.
- Step 4: An OTP will be sent to the mobile number associated with the Aadhaar card. Enter the OTP and click the 'validate' button.
- Step 5: Upon successful Aadhaar validation, proceed to the PAN verification page. Enter the 'type of organisation,' 'PAN' number, and click the 'validate' button. Also, specify whether you filed the previous year's ITR and if you possess a GSTIN.
- Step 6: The Udyam registration application form will appear. Complete all necessary details, including the entrepreneur's name, mobile number, enterprise name, plant/unit location, enterprise address, enterprise status, bank details, unit activity, NIC code, and employment count.
- Step 7: Furnish details on investment in plant and machinery, turnover, and select the declaration. Click the 'submit' button and obtain the final OTP.
- Step 8: Enter the final OTP received and submit the form. Your Udyam e-registration certificate will be sent to your email.
By adhering to these steps, MSMEs can efficiently accomplish the Udyam registration process and unlock the benefits and support extended to registered enterprises under the MSME category. You can download MSME certificate at any time you need.
Significance of MSME certificate in getting a business loan
The MSME certificate plays a significant role in securing business loans from banks and other financial institutions. By registering for the MSME certificate, businesses can avail of the benefits offered under various government schemes and incentives, making them more creditworthy. Some of the benefits of MSME certificate registration for availing business loans include:
- Lower interest rates: Banks and financial institutions offer lower interest rates to businesses with an MSME certificate as they are perceived as more reliable and creditworthy.
- Quicker loan approval: Businesses with an MSME certificate can enjoy a faster loan approval process.
- Access to a wider range of business loans: Getting an MSME certificate opens up opportunities for businesses to access a wider range of business loans, such as working capital loans and equipment financing loans.
Registering for the MSME certificate is a crucial step for small businesses and enterprises to avail of various government schemes and incentives. Businesses can easily complete the process online, making it simple and convenient. Once registered, businesses can take advantage of the benefits offered under government schemes, including easier access to business loans at lower interest rates. If you are a small business owner or an entrepreneur, make sure to register for the MSME certificate to take advantage of these benefits and grow your business.
