Here's How to Save Your Small Business

The government has proclaimed major things that have been introduced to safeguard companies categorised under the MSME segment
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

  • |
  • Jul 07,2020
  • |
  • 14 Mins Read

Coronavirus has not only affected individuals but impacted companies also. Companies specifically MSME units have been battered by the epidemic. As a result, the Indian government has taken a major move and agreed to change the definition of MSME. Many companies that were not part of the MSME industry are now included in it.   

Besides this, there are major things that have been introduced to safeguard companies categorised under the MSME segment. Some of them are mentioned below.

 

  • Vocal for Local

 

There is a common presumption among consumers that local brands or new localised companies are not good enough as compared to the large brands. The MSME units essentially do not have enough funds to promote itself massively. Therefore, the companies need to adopt the 'vocal for local' theme.   

It can be started from the virtual world; companies that sell products online through Amazon can now switch to Tata Cliq. Tata Group-led platform is as good as Amazon and is a completely homegrown online platform. Secondly, MSME enterprises can ascertain foriegn competitors in their business landscape and try to replace them in the Indian market by offering the same quality to the consumers.

 

  • Be a Part of Self-reliant India-Movement 

 

In order to become a part of this movement, a company has to expand its business globally. While stepping into the global market, it is imperative to check legal aspects of the global market.

After this comes trademark, in the Indian ecosystem entrepreneurs do not give much consideration to the company's trademark. However, it is inverse in the outside world. 

By having a trademark, a company can do branding effortlessly on the digital platform. Any other company could not do branding on their product if the company has its own trademark. 

Besides this, a company has to procure patent rights if it invents a product. It is significant because when the company reaches out in the global landscape. It will have to face various competitors and for that, it needs to be secured legally.

MSME global mart is another initiative started by the government. On this digital platform, if a company seeks to go international, then it can do registration here at a minimal cost of INR 3,000. Also, the platform helps to grab global tenders and other contracts. In a similar vein, Government eMarketplace (GeM) has been introduced wherein the MSME units become government’s suppliers. In essence, the MSME units have to register on the platform and then begin applying for the government’s tender. 

Zero defect-Zero effect (ZED) is a page on the Ministry of MSME website. ZED was introduced in 2015 and helps MSME units avail various offers such as availing loans, patent rights, testing equipment, and ZED certification etc. 

Single Point Registration, which is a scheme of NSIC, allows MSME companies to register on the platform. When a company gets government tender if it is registered in NSIC then it would not have to pay EDM. 

 

  • Get Funding from MSME Loan Scheme for Business Revival 

 

The government is offering various schemes to give financial support to the MSME businesses. Of late, INR 3 lakh crore collateral free automatic loans for business including MSME. For this, the eligibility is that the MSME enterprise primarily should be existing borrowers. Secondly, there should be outstanding loan up to INR 25 crore as on 29 February. Thirdly, a company’s turnover should be up to INR 100 crore. If a company meets the eligibility criteria, then it would be sanctioned a fresh loan of 20 per cent of loan outstanding as above.     

INR 20,000 crore Subordinate Debt for MSMEs is another MSME-specific loan scheme launched by the government. For this, the eligibility is that an operational MSME unit which is a NPA as on 30 April, 2020. Also, it needs to be affected by the epidemic in some way. Under this, 90 per cent guarantee is offered from the scheme and the remaining 10 per cent is offered from promoters. A company gets a maximum tenure of 10 years along with a moratorium of 7 years on payment of principal.

Other schemes are Prime Minister's Employment Generation Programme (PMEGP) Margin, 2nd Loan for up-gradation of the existing PMEGP or MUDRA unit, Credit Guarantee Scheme for Micro and Small Enterprises.    

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