MSMEs – Role of Professionals - Experience sharing P UDAYA SHANKER Head, Centre for Industrial Credit & Financial Services School of Enterprise Management

Coverage MSME act Credit linked capital subsidy scheme Credit guarantee fund for small industries Venture capital Marketing assistance for SSI products Technology development & modernisation Cluster development National manufacturing competitiveness and capacity building

MSME act

Credit linked capital subsidy scheme

Credit guarantee fund for small industries

Venture capital

Marketing assistance for SSI products

Technology development & modernisation

Cluster development

National manufacturing competitiveness and capacity building

Coverage Micro credit ISO certification Intellectual property rights Delayed payments to small industries Credit rating Rajiv Gandhi Udyami Mitra Yojna

Micro credit

ISO certification

Intellectual property rights

Delayed payments to small industries

Credit rating

Rajiv Gandhi Udyami Mitra Yojna

Micro, Small & Medium Enterprises Development (MSMED) Act, 2006

Micro, Small & Medium Enterprises Development (MSMED) Act, 2006

Classification of enterprises Manufacture/production of goods Providing/rendering of services

Classification of enterprises

Manufacture/production of

goods

Providing/rendering of

services

Manufacturing enterprises Investment limit Plant and machinery Excluding land & building

Manufacturing enterprises

Investment limit

Plant and machinery

Excluding land & building

Micro enterprises – upto Rs.25 lakh

Micro enterprises –

upto Rs.25 lakh

Small enterprises – above Rs.25 lakh & upto Rs.5 crore

Small enterprises –

above Rs.25 lakh &

upto Rs.5 crore

Medium enterprises - above Rs.5 crore & upto Rs.10 crore

Medium enterprises - above Rs.5 crore &

upto Rs.10 crore

Services enterprises Investment in equipment Excluding land & building No relation with turnover or manpower engaged

Services enterprises

Investment in equipment

Excluding land & building

No relation with turnover or

manpower engaged

Micro enterprises – upto Rs.10 lakh

Micro enterprises –

upto Rs.10 lakh

Small enterprises – above Rs.10 lakh & upto Rs.2 crore

Small enterprises –

above Rs.10 lakh &

upto Rs.2 crore

Medium enterprises - above Rs.2 crore & upto Rs.5 crore

Medium enterprises - above Rs.2 crore &

upto Rs.5 crore

Credit Linked Capital Subsidy Scheme Technology up-gradation Select sectors 15 per cent upfront to MSME

Credit Linked Capital Subsidy Scheme

Technology up-gradation

Select sectors

15 per cent upfront to MSME

Credit Guarantee Fund Scheme for Small Industries (CGFSI) Collateral free lending upto Rs.25 lakh

Credit Guarantee Fund Scheme for Small Industries (CGFSI)

Collateral free lending upto Rs.25 lakh

Venture capital scheme Innovative Not qualified for conventional financing

Venture capital scheme

Innovative

Not qualified for conventional financing

Marketing assistance scheme for SSI products Specialised organisations Marketing assistance Infrastructure Support services

Marketing assistance scheme

for SSI products

Specialised organisations

Marketing assistance

Infrastructure

Support services

Market related activities: R&D Product up-gradation & standardisation Advertising, branding, catalogue Audio visual aids Trade fairs and exhibitions, sales promotion tours Distribution networks, showrooms/ retail outlet/ware housing Training of personnel

Market related activities:

R&D

Product up-gradation & standardisation

Advertising, branding, catalogue

Audio visual aids

Trade fairs and exhibitions, sales promotion tours

Distribution networks, showrooms/

retail outlet/ware housing

Training of personnel

Technology Development and Modernisation Scheme (TDMFS) New/existing SSI, generally private limited companies Equipment Technical know how Designs, drawings Up-gradation of process technology and products, packaging TQM and ISO 9000

Technology Development and Modernisation Scheme (TDMFS)

New/existing SSI, generally private limited companies

Equipment

Technical know how

Designs, drawings

Up-gradation of process

technology and products, packaging

TQM and ISO 9000

Industries Cluster Development Programme (SICDP) Micro & Small Enterprises Cluster Development Programme - Technology upgradation for a group of MSMEs of one industry

Industries Cluster Development

Programme (SICDP)

Micro & Small Enterprises

Cluster Development

Programme - Technology

upgradation for a group of

MSMEs of one industry

National Manufacturing Competitiveness Programme (NMCP) Schemes Scheme for Capacity Building - Strengthening of database and advocacy by industry/enterprise associations

National Manufacturing Competitiveness Programme (NMCP) Schemes

Scheme for Capacity Building - Strengthening of database and advocacy by industry/enterprise associations

Micro Credit Scheme Micro Finance Institutions (MFIs) Having network and experience in small saving-cum-credit programmes Self-Help Groups (SHGs), Federation of SHGs, Non-Banking Finance Companies dealing with poor, specialised co-operative societies, etc. Rating

Micro Finance Institutions (MFIs)

Having network and experience in small saving-cum-credit programmes

Self-Help Groups (SHGs), Federation of SHGs, Non-Banking Finance Companies dealing with poor, specialised co-operative societies, etc.

Rating

ISO 9000/ISO 14001 Certification Reimbursement Scheme Acquiring Quality Management System (QMS) ISO 900 certification/ environment management (EMS) ISO 14001 certification To the extent of 75% or Rs.75,000 whichever is lower For SSIs/ancillary/tiny/SSSBE

ISO 9000/ISO 14001 Certification

Reimbursement Scheme

Acquiring Quality Management System (QMS) ISO 900 certification/ environment management (EMS)

ISO 14001 certification

To the extent of 75% or

Rs.75,000 whichever is lower

For SSIs/ancillary/tiny/SSSBE

Intellectual property rights Patents and registration under geographical indications of goods Domestic patents Rs.25,000 grant Foreign patent Rs.2 lakh grant Geographical indications Rs.1,00,000 grant

Patents and registration under geographical indications of goods

Domestic patents Rs.25,000 grant

Foreign patent Rs.2 lakh grant

Geographical indications Rs.1,00,000 grant

Delayed payments to micro and small enterprises Make payment on or before date agreed in writing In no case, period agreed in writing shall exceed 45 days from the day of acceptance/deemed acceptance

Delayed payments to micro and small enterprises

Make payment on or before date agreed in writing

In no case, period agreed in writing shall exceed 45 days from the day of acceptance/deemed acceptance

Where buyer fails to make payment Liable to pay compound interest with monthly rests (3) three times of the bank rate Annual accounts to furnish information of unpaid amount with interest Principal amount and interest due thereon (shown separately)

Where buyer fails to make payment

Liable to pay compound interest with monthly rests

(3) three times of the bank rate

Annual accounts to furnish information of unpaid amount with interest

Principal amount and interest due thereon (shown separately)

Report on amount of interest and amounts paid during each accounting year Amount of interest due/payable for period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest Amount of interest accrued and remaining unpaid; and

Report on amount of interest and amounts paid during each accounting year

Amount of interest due/payable for period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest

Amount of interest accrued and remaining unpaid; and

Amount of further interest due and payable even in succeeding years, until such date when interest dues are actually paid Amount of interest payable or paid, shall not, for the purposes of computation of income, allowed as deduction. (Interest not to be allowed as deduction from income .)

Amount of further interest due and payable even in succeeding years, until such date when interest dues are actually paid

Amount of interest payable or paid, shall not, for the purposes of computation of income, allowed as deduction. (Interest not to be allowed as deduction from income .)

Credit rating of small enterprises NSIC Empanelled agencies: ICRA, ONICRA, Dun & Bradstreet, CRISIL, FITCH and CARE, SMERA

NSIC

Empanelled agencies: ICRA, ONICRA, Dun & Bradstreet, CRISIL, FITCH and CARE, SMERA

Rajiv Gandhi Udyami Mitra Yojna (RGUMY) First generation entrepreneurs – stages Selection of enterprises to financing by agencies Legal formalities Follow up

First generation entrepreneurs –

stages

Selection of enterprises to financing by agencies

Legal formalities

Follow up

Building of data base for products and services in specific locations Model formats for project report preparation Drawing of long term perspective for enterprise sustenance Establishing linkages with the suppliers and customers Empanelling experts in various fields of operation

Building of data base for products and services in specific locations

Model formats for project report preparation

Drawing of long term perspective for enterprise sustenance

Establishing linkages with the suppliers and customers

Empanelling experts in various fields of operation