At present, the corona epidemic is prevalent all over the world. Most countries are opting for a complete lockdown of the country to avoid the Kovid-19 epidemic. But, the lockdown has its challenges and problems. No country can have a lockdown for too long. 

The economy of the country concerned may collapse due to the lockdown. People can become unemployed and there may be starvation situation in the country. In lockdown also, the sector whose work continued to be conducted continuously is the micro, small, and medium industry i.e. MSME industry. 

The speciality of the MSME sector is that even better products can be done at low cost and limited resources. More people can be hired. If we talk about the total number of MSMEs in India, then according to the annual report (2018-19) of the Ministry of MSME, there are 6.34 crore micro, small and medium industries in the country. The number of people employed in these 6.34 crore MSMEs is more than 11 crore. (This data is taken from the Annual Report 2018-19 released by the MSME Ministry). 

The importance of micro, small, and medium industries in India can be understood from the fact that the MSME sector accounts for 30% of the country’s GDP. It has a 31.8% stake in GVA. 48% of the country’s exports are from this region. Meaning MSMEs have an important contribution to making the country economically prosperous. 

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However, MSME problems are not hidden from anyone. From time to time, the news of the closure of all MSMEs continues to be the headline of all newspapers. Now the government is trying to improve the condition of MSMEs. To improve the condition of MSMEs and to set up a new MSME, the Government of India has announced the formation of a Micro Finance Institution. Let us understand in detail about this institution. 

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What Is Microfinance Organization? 

A massive package of Rs.30 thousand crores have been announced by the Central Government to rescue MSMEs from the Corona crisis. In the relief package announced by Finance Minister Smt. Nirmala Sitharaman, it has been said that the government will provide loans to MSMEs and street vendors. The loan will be provided to MSMEs through a loan package of Rs. 30 thousand crores. 

For this, the government has formed a microfinance institution. This institution will consider loan applications of MSMEs and provide approval for loans. After this, MSME traders will get loans from banks, NBFCs, and other financial institutions. It is to be noted that this loan institution will also consider those MSMEs to be eligible who have not repaid the loans in the past or the loan amount has been converted into NPA – Non Profit asset. 

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Also Read: MSME & Small Business – Digital Transformation for Growth

Business Can Be Started Through The Small Scale Industries Scheme 2020 

Funds have been released for the welfare of MSMEs already run by the Central Government. Along with this, the loan scheme has been started to start the business. To start a new business, a loan scheme called Small Industries Scheme 2020 has been launched. Under this scheme, people who want to do business will be able to get loans ranging from Rs 25 lakh to Rs 5 crore without mortgage of property. 

Credit Guarantee Fund Trust set up by SIDBI for loans up to Rs 25 lakh for micro-enterprises, loans ranging from Rs 25 lakh to Rs 1 crore for small enterprises and Rs 1 crore to Rs 5 crore for medium enterprises will be provided. 

Loan Schemes For MSMEs 

It is the effort of the Central Government that the maximum number of industries should be established in the country. For this, the government is preparing for every level. For setting up and running the industry Loans are being provided as financial help. 

The online portal ‘Udyog Aadhaar‘ has been created for the registration of industries. The red tape in the registration of industries has been almost completely abolished. Everything has been done online. The loan schemes have been launched for industries include Pradhan Mantri Mudra Yojana, Pradhan Mantri Rojgar Yojana, Prime Minister Employment Generation Program, Credit Guarantee Fund Scheme for Micro and Small Enterprises, Credit Link Capital Subsidy Scheme, MSME, etc. 

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The Mudra Yojana has emerged as a successful scheme for financial assistance for micro, small, and medium scale industries. Pradhan Mantri Mudra Loan Scheme was launched in 2015. Under this scheme, loans up to Rs 10 lakh are provided to MSMEs in 3 categories without any mortgage. 

Also Read: Top Challenges faced by MSME due to COVID

To Increase Business, ZipLoan Gets Business Loan Up To Rs 7.5 Lakh 

A business loan of up to Rs 7.5 lakhs is provided to MSME traders by the country’s leading non-banking financial company-NBFC ‘ZipLoan‘ in just 3 days * without any pledge. We should inform you that the business loan from ZipLoan is free after 6 months of pre-payment charges. 

The following are the eligibility to get a business loan from ZipLoan: 

  • Businesses must be more than 2 years old. 
  • The annual turnover of the business should be more than Rs 10 lakh. 
  • Must have an ITR file for the business. The last filed ITR should be more than Rs 1.5 lakh. 
  • A House or place of business should be in the name of the businessman or the name of blood relative.