8 key benefits of obtaining MSME registration

While MSMEs are considered as growth engines of an economy, they still face several operational & financial challenges hindering their growth prospects. Therefore they need to be provided with an impetus not just to sustain but also to keep the spirit of entrepreneurship alive.

Here are some of the key benefits of obtaining MSME registration in India-

1. Overdraft interest rate benefit

MSME registered entities can avail the benefit of 1% on bank overdraft interest which could differ from bank to bank. This is especially significant during unfavourable market conditions.

2. Patent registration subsidy

MSME registered entities are entitled to a hefty 50% subsidy on patent registration!

3. Protection from delayed payments

In case a buyer delays payments to MSMEs beyond 45 days from availing their products or services, they are required to pay interest on the delayed payments at 3 times the rate notified by RBI, thus encouraging timely payments and providing liquidity to MSME businesses

4. Collateral free bank loans

The Credit Guarantee Trust Fund Scheme is an initiative to provide collateral-free loan to MSMEs, undertaken by Government of India, SIDBI and the Ministry of Micro, Small and Medium Enterprise.

5. Industrial Promotion subsidy

Businesses that have been registered as MSMEs are eligible for subsidies for Industrial Promotion as provided by the Government

6. Concessions on electricity bills

MSME enterprises can apply for concession on electricity bills by applying to the department of electricity along with their MSME registration certificate. This especially aids in boosting production activities in the manufacturing sector.

7. Reimbursement of ISO Certification Charges

MSME enterprises can claim a reimbursement for all expenses incurred on obtaining ISO Certification

8. Government tenders

There are a lot of government tenders that are open exclusively to MSMEs, thus supporting their growth and promoting small business participation in India.

Disclaimer
The contents of this article are for information purposes only and do not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc. before acting on the basis of the above write up. By the use of the said information, you agree that the Author / Treelife Consulting is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.