New Delhi: To promote ease of doing business for Micro, Small and Medium Enterprises, the Union Ministry of MSME has taken several initiatives and notified a simple one-page registration Form (UAM) last year.
This is an important step to promote ease of doing business for MSMEs in India as the UAM replaces the filing of Entrepreneurs’ Memorandum with the respective States/UTs. The information sought is on self-certification basis, no supporting documents are required at the time of online filing of UAM and no fees for UAM registration.
The Government of India notification provides a mechanism for revival and rehabilitation with a definite voice to the Entrepreneurs and is expected to balance the interest of debtors and creditors. The framework enables Banks/creditors to identify MSME’s which are in the stage of initial stress and take corrective action to prevent them from becoming NPA’s. MSMEs can seek revival and rehabilitation benefit through a committee constituted by banks with representative from State Governments, experts and others.
The Ministry of MSME is also implementing various schemes and programmes for promotion and development of MSME sector. The major schemes/programmes include Prime Minister’s Employment Generation Programme (PMEGP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme (CLCSS), National Manufacturing Competitiveness Programme, Micro & Small Enterprises – Cluster Development Programme (MSE-CDP), Marketing Development Assistance, Skill Development Programmes, International Cooperation Scheme, etc.
To facilitate easy flow of credit to Micro, Small and Medium Enterprises (MSMEs), a Credit Guarantee Fund Scheme for Micro and Small Enterprises (MSEs) is being implemented under which guarantee cover is provided for collateral free credit extended to MSEs. The Reserve Bank of India (RBI) has issued guidelines in May 2010, which mandatorily require banks to dispense without collateral requirement for loans upto Rs.10 lakh to MSMEs.
Editorial comment on fast flow of credit to MSMEs: How the banks will function once bad debts for MSMEs start piling up and loan recovery would get jeopardized as the loans would not be backed by collateral security. This will cripple the banking system…..