MSME –

ELIGIBILITY,
SCOPE
AND
BENEFITS
•MSME stands for Micro,
Small, and Medium
MEANING OF MS
Enterprises. In accordance
with theMEMicro, Small, and
Medium Enterprises
Development (MSMED) Act
in 2006, the enterprises are
classified into two divisions.
•Manufacturing
enterprises – engaged in
the manufacturing or
production of goods in any
industry
•Service enterprises –
engaged in providing or
rendering services
 OLDER MSME
CLASSIFICATION

Sector Criteria Micro Small Medium

Manufactu Investment  < Rs.25 < Rs.5 < Rs.10 crore

ring lakh crore

Services Investment  < Rs.10 < Rs.2 < Rs.5 crore

lakh crore
EFFECTS OF ATMANIRBHAR BHARAT
ABHIYAN ON MSME CLASSIFICATION

 Now, under the   Revised MSME Classification

Atmanirbhar Bharat
Criteria Micro Small Medium*
Abhiyan, the government
revised the MSME
classification by inserting
Investment  < Rs.1 < Rs.10 < Rs.50
composite criteria of both
       &  crore crore crore
investment and annual
Annual  &   & &
turnover. Also, the
Turnover < Rs.5 < Rs.50 < Rs.250
distinction between the
crore crore crore
manufacturing and the
services sectors under the
MSME definition has been
removed. 
BENEFITS OF MSME

RS 3 LAKH CRORES RS 20,000 CRORE RS 50,000 CR. EQUITY

COLLATERAL FREE SUBORDINATE DEBT FOR INFUSION THROUGH
AUTOMATIC LOANS FOR MSMES MSME FUND OF FUNDS
BUSINESS, INCL MSME
MSMEs have  Emergency Credit Line to MSMEs from
been badly hit Banks and NBFCs up to 20% of entire
due to outstanding credit as on 29.2.2020
COVID19 need  Borrowers with up to Rs. 25 crore outstanding
additional and Rs. 100 crore turnover eligible
funding to  Loans to have 4 year tenor with moratorium of
meet 12 months on Principal repayment
operational  Interest to be capped
liabilities built
 100% credit guarantee cover to Banks and
up, buy raw
NBFCs on principal and interest
material and
restart  Scheme can be availed till 31st Oct 2020
business  No guarantee fee, no fresh collateral
 Stressed MSMEs need equity support

Rs 20,000
crores Govt. will facilitate provision of Rs. 20,000
Cr. as subordinate debt

Subordinate
Debt for Two lakh MSMEs are likely to benefit

Stressed
Functioning MSMEs which are NPA or are
MSMEs stressed will be eligible

Govt. will provide a support of Rs. 4,000 Cr.

to CGTMSE

CGTMSE will provide partial Credit

Guarantee support to Banks

Promoters of the MSME will be given debt by

banks, which will then be infused by
promoter as equity in the Unit.
 MSMEs face severe shortage of Equity.

Fund of Funds with Corpus of Rs 10,000 crores

will be set up.

Will provide equity funding for MSMEs with

growth potential and viability.

Rs 50,000
Fund structure will help leverage Rs 50,000 cr of
cr. Equity funds at daughter funds level
infusion for
MSMEs Will help to expand MSME size as well as
capacity.
through
Fund of Will encourage MSMEs to get listed on main
board of Stock Exchanges.
Funds