In India, the micro, small and medium enterprises are the MSME business organizations. It is quite a significant concept in a country like ours.
Moreover, you should understand the difference between MSME business loans and MSME databank before proceeding further with the loan.
What is MSME databank?
The concept of the MSME database was launched on 11th August 2016. It is a comprehensive database consisting of all the country’s operating medium and small enterprises. Besides, this particular database consists of all the information related to acquisitions, mergers, import and export of machinery, and the transfer of technologies. Moreover, this information enables the Government of India to monitor different loan policies and schemes directed at various medium and small enterprises. To be eligible for the database registration, the business needs to comply with different prerequisites related to the UAN and PAN. For different Northeastern regions, it is extremely important to submit the registered mobile number along with the UAN. But in the case of corporate companies, the business owner should submit the PAN of the company. However, the single owner must check out the PAN of the sole proprietor.
To register with the MSME database, you need to register on the online portal by filling up the registration form. Every business owner can follow up the steps including:
- Visit the MSME data Bank official website and fill in the details mentioned there. It includes the PAN and other details, enterprise name, state, and address.
- You must also enter the product and factory details, employment status, enterprise address, last month’s turnover, etc.
- Also, you should fill up the bank name, IFSC code, account number, other details, etc.
- You must also fill in business-specific details. It includes information related to export, joint ventures, and many others.
What is an MSME loan?
The MSME loan is an unsecured loan that various financial institutions offer to entrepreneurs that helps to meet business-related expenses. As per the rules and regulations of RBI and the Indian government, these loans are provided to a certain section of business enterprises that falls under the category of micro, small and medium enterprises.
Micro enterprises would have an investment threshold of less than Rs. 1 crore. The threshold lies somewhere less than Rs. 10 crores for small and medium enterprises and Rs. 20 crores, respectively. However, the turnover threshold of the micro and small enterprises lies at less than Rs. 5 crore and Rs. 50 crore respectively. On the other hand, the turnover threshold of medium enterprises should be less than Rs.100 crore.
Apart from the micro, medium, and small enterprises loan, the financial institution also offers these loans to various government schemes. However, an MSME business loan comes with a variety of eligibility criteria. The business owners must fulfill all the terms and criteria to get full-fledged loan benefits.
Leading lenders offer such loans to help various enterprises meet the immediate funding requirements. Moreover, the minimum documentation and eligibility make the loan process quite simplifying. The micro, medium, and small enterprises are also offered affordable interest rates that one can repay over a flexible tenor.