Category: MSME

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Business Startup Ideas Startup

5 Reasons Why Franchise Business In India Is A Golden Opportunity For Entrepreneurs & Solopreneurs!

5 Reasons Why Franchise Business In India Is A Golden Opportunity For Entrepreneurs & Solopreneurs!
5 Reasons Why Franchise Business In India Is A Golden Opportunity For Entrepreneurs & Solopreneurs!

2020 was a tough year. And so is 2021. Many businesses are forced to shut. Businesses that survived the wrath of 2020, couldn`t bear the disasters of 2021 and disappeared into the darkness of uncertainty and financial crisis.

Many companies had to take the difficult decision to lay off their employees while carrying the health concern for both their customers and families. What had the potential to be a great year quickly became another year of waiting for the worst to be over in India.

It’s no secret that the events have inflicted damage on the global economy. Many people are looking for new ventures to start on their own and a franchise business in India could be a golden opportunity for them.

According to a report published in Franchise India, “franchising in India has clocked the annual growth rate of 30% with market size of USD 7.2 billion. This makes India, the second-fastest-growing industry.”

If you are looking to start your own business, there are many franchise ideas for small towns and cities that are thriving even during an economic or pandemic crisis. Watch, Million Dollar Franchise Business During Covid 19, here:

Here are five reasons why you should consider franchising in 2021 and more years to come:

  1. Successful Franchise Business Creates Employment

Where many businesses had to shut down or reduce their workforce, many businesses like Bada Business continued to grow and were able to prosper, remain profitable, and even hired more workers. Many franchises of Bada Business had a stable and successful business system. With its premium quality content, services, and products, many franchises across the country witnessed a surge in their customers and continue to attract customers, even today.

  1. Franchise Business Provide Support & Structure

When you come up with a small business startup plan, you are on your own. From capital investment to sales & marketing, business strategies to business structure, you will have to figure out everything. On the other hand, when you take a franchise of an already established business, you are provided with a systematic approach, structure, and support system that is already successful. Franchise business in India is far less risky than a do-it-yourself endeavor.

  1. During a crisis, Franchisees are not Left Alone

As we said earlier, being a franchise partner of an already established and popular brand provides you with a solid team. They share effective business techniques and best practices to enable their franchise partner to tackle unexpected circumstances, which is way better than independent business owners who learn after spending years in the same business.

  1. Provides more opportunities to minimize Expenses

Purchasing inventory from a larger network helps the franchise partners to keep their expenses down. During a crisis of any kind, this also helps them to stay competitive. Franchise business partners also have an added advantage to stay upgraded and updated with the latest technology as the franchise brand provides them with new technology and software to help them stay ahead in the market.

  1. Provides name recognition

Taking a franchise of a well-established and popular brand comes with its perks. The topmost benefit is that even during the hard times a brand name has the upper hand and attracts customers automatically. As the customers already relate to a particular brand, their loyalty will bring them to your shop because of the brand value.

Any popular brand is known for its consistency, and quality, which results in a customer`s loyalty and confidence in the product or service. This simply means that you do not have to invest money in marketing and advertising, as customers already connect with the brand.

Owing to a business, be it a franchise business in India, or an independent business, demands a determined entrepreneurial spirit. Depending on the industry, each franchise business has different requirements. But in general, to run a successful business you need great leadership skills, strong organizational and communication skills, plus a willingness to understand a whole new world of business.

Many times, people who lack awareness regarding their career, also take help from a business motivational coach to understand the dynamics of business.

To know more about building a business from the scratch, you can take the ‘Entrepreneurship Course’.

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Business Startup Ideas MSME

5 Common Mistakes Entrepreneurs Make While Starting MSME Startup!

5 Common Mistakes Entrepreneurs Make While Starting MSME Startup!
5 Common Mistakes Entrepreneurs Make While Starting MSME Startup!

Small and Medium Enterprises (MSME) is the backbone of the Indian economy. Around 30% of the GDP in the Indian economy is contributed by MSME. It has created approximately 11 Cr. Jobs, which is second only to the agricultural sector and accounts for 45% of the total Indian manufacturing output, and 40% of the country`s total exports.

Despite their mammoth contribution to the Indian economy and MSME schemes for the startup business, this sector is facing lots of challenges in which an unorganized business structure and proper mentorship top the chart.

While MNCs and other large firms operate with a set of business advisors, business analysts, and life coaches for distinct aspects of business, MSMEs generally lack the key insights, resources, and inclination to reach out to a professional for expert guidance.

As a result, there are few common mistakes that MSME enterprises continue to make, impacting their growth. However, in the past few years, there has been an upsurge in the number of business coaches in India and business consultants that are specifically focused on Startups, SMEs, and MSMEs.

These mentors help first-generation entrepreneurs with how to start an MSME business and navigate through complex challenges of the business world.

Do you have MSME startup ideas, but have no clue from where to start? Well, here is a list of 5 common mistakes that most Small and Medium Enterprises make, which can be avoided with the help of the best business coach in India:

  1. Lack of Planning

Initially, many businesses start with an idea of a product or a service, which, in principle, seems to resolve the burning problems of the consumer and result in a huge commercial success. But, it fails due to proper understanding and a good MSME business plan.

The matter of fact is that every business small or large needs a business plan that includes mission and strategy, financial objectives, development of finances, sales and marketing strategies, resource plan, competitor analysis including pricing, market summary, and financial forecasts.

If your business plan is not based on well-researched information and accurate statistics, it may fail. You can take the help of a business coach to come out with a business plan that is based on practical information and not on some unrealistic expectations.

  1. Lack of Foresight

Most businesses start with a long-term vision, but after managing daily challenges and internal business crises, it loses focus and gets lost in basic survival. Many others will become too satisfied with their state of business and might lose sight of growth and expansion after getting comfortable.

These issues might appear minor; however, in the long run, they can become the major reason behind the failure of a business. This can be addressed with the help of a business coach in India. A business mentor can help you to come out with a systematic long-term growth chart and will work together to ensure that the same is followed.

Through consistent follow-up, support and guidance, a business can overcome short-term challenges and pacify setbacks by implementing a practical and achievable strategy for growth.

  1. Lack of Working Capital

Being optimistic is one thing, but setting an unrealistic expectation by ignoring the statistics is another. Time after time, there have been so many MSME business plans where the owners have an unachievable and unrealistic expectation about revenue and cash generation. This irrational calculation leads to financial crunch and failure.

Other business plans may focus on set-up costs but fail to factor in the day-to-day running costs. Every entrepreneur must understand that the establishment of a business takes a year or two. During that period it is crucial to keep the machines running, lights on and staff paid. Taking a more realistic approach towards your business for the first 18-24 months will increase your chances of running your working capital needs.

  1. Resistance to learning & upgrade skills

Change is the only constant! And, due to the innovation in the digital world, a constantly evolving consumer landscape, businesses need to adapt to new technologies. It makes it almost inevitable to escape these changes. Not upgrading your skill sets as an entrepreneur, may hinder your progress and failure in business.

While most SMEs and MSMEs look at skill up-gradation, they find investment in staff training and continuous learning as an investment burden. However, if done right, it has the potential to not only get the business out of the crisis but can also ensure that the business remains in the league and grows exponentially.

  1. Hesitant to Adopt Technology

Technology has become an integral part of our lives. From healthcare to entertainment, wellness to leisure, agriculture to the BFSI sector the presence of technology is evident everywhere. The technology-enabled business can only thrive in the 21st century. Despite this, a large number of MSMEs continue to shy away from adopting cost-effectiveness and continue to depend on manual labor.

Apart from the above-mentioned points, there are some basic factors as well like financial planning; smart marketing techniques, leveraging government policies, tools, and adequate focus on alliances are some of the other areas where SMEs and entrepreneurs must focus.

Are you an entrepreneur and looking for solutions, which you are facing in your entrepreneurial journey, you can take the ‘Entrepreneurship course’.

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Business motivation Business Startup Ideas

5 Best Business Ideas For Students To Make Money While Studying!

5 Best Business Ideas For Students To Make Money While Studying!
5 Best Business Ideas For Students To Make Money While Studying!

Does money make online from the comfort of your home sound interesting? For many people, including students, making money online would be an absolute dream come true. These are some of the best business ideas for students. And if they could find a suitable way to make money, they could earn their own pocket money, while still focusing on their studies.

Life as we may presume is not easy in academic years. Pressure to excel in studies, parents’ pressure, stressful subjects, and social anxieties all contribute to the struggle during their formative years. On top of it, the financial aid that students receive from parents is limited. This is why an average Indian student`s life is highlighted by Maggie noodles and old-rugged jeans.

So, if you are a student and want to start making passive income along with your studies, then here is a piece of great news for you!

Read this article till the last line because we are going to reveal some of the most amazing money-making ideas for students that will hone their entrepreneurial skills.

Keep reading!

  1. Love writing? Become a Freelance Writer

From maintaining daily journals to writing short paragraphs, if this is something that excites you and calms you down at the same time becoming a freelance writer is a good opportunity for you. Students tend to spend hours and hours writing for classes.

However, what if we tell you that there is one thing that most of the students don`t know about and in the absence of it, spend their academic years penniless? Well, you can get paid for writing high-quality articles in the real world.

It may sound too good to be true, but in their bit to reach out to as many people as it is possible, brands are always on the lookout for people with excellent writing skills to help communicate their brand message across a wider audience. Freelance writing is a wonderful money-making idea for students as it provides remote work, flexible hours, and more practice at a skill students already have.

  1. Start Tutoring

When you are studying, it not only provides you education and a certificate but also a vast reserve of knowledge to impart to share with other students, who are junior to you. If you are good at sharing knowledge and information with others, you start giving tuitions to your juniors.

All you have to do is to reach out to students and you will find out that there are good numbers of students who are struggling with subjects that you have already mastered. Teaching them will not only provide aid to juniors in studies but will also improve your hold on a subject, while also making a serious income on the side. If you are more creative, you can also take guidance from one of the best business coaches in India– Dr. Vivek Bindra.

  1. Consult for Businesses

Due to cut-throat competition and intense brand presence on all the social media platforms, there is a high demand for the youth perspective from consumer-centric brands. Companies today, not only want to know about the youth`s perspective, but also want to pave new pathways to reach out to them.

As a student, if you think you have the strategic perspective that aligns with the business requirement, then you can simply become a business consultant. All you need is a website and a business card; you can turn your knowledge into a profitable online business, and start helping brands to connect with young students.

  1. Start a company

Do you think you are too young to start a company? Well, if you have a million-dollar business idea, starting a company will be an easy task. Not sure about that?

Tilak Mehta,a 13-year old kid from Mumbai has started his own company- Paper and Parcels that delivers courier within the city on the same day. His USP—affordable price that is around 30-40% less than what premium companies may cost you.  You can watch his full interview, right here.

The market is brimming with some of the business ideas for students, which can be implemented by students. Using you entrepreneurial approach and spirit, you can gain valuable experience from beginning your own company. You can also take full advantage of the resources that are available around you to build something that is profitable.

As the college grounds are ideal for budding companies and entrepreneurs, you can start your own company by using the high-density network, and access to younger customers with good purchasing power.

  1. Social Media Influencer

Are you good at expressing your ideas that might influence others and help them in day-to-day challenges? Do you think you have the best clothing style? Or do you have culinary tips to share with people? If, the answer is yes, and you love to spend time on social media you can become a social media influencer.

All you need is a considerable number of followers on your profile and a clear understanding of what the audiences like to watch and want. You can get paid by brands to run social media accounts for companies. This is one of the best money making ideas for students that can help them earn much more than just their pocket money.

If you are a student and want to open new revenue gates, you can try some or all of the business ideas that we have mentioned above. You can also listen to some of the best business coaches in India like Dr. Vivek Bindra to get more brilliant ideas.

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Business Startup Ideas MSME

5 Profitable MSME Startup Ideas You Can Kick-start In India!

5 Profitable MSME Startup Ideas You Can Kick-start In India!
5 Profitable MSME Startup Ideas You Can Kick-start In India!

Small business entrepreneurs have many plenty of opportunities to explore. However, all they need is a great small business idea.

Today, most young professionals want to build their start-ups. But, the major reason why most people do not dare to pursue their dreams is due to lack of funds, and MSME startup ideas.

Sometimes it is also the lack of in-depth knowledge and confusion about how to start an MSME business, due to which many young wantrepreneurs remain disillusioned. Though, what they are not aware of is the fact that not all good business ideas require large funds.

According to a study conducted by IBM Institute for Business Value found that 91% of startups fail within the first five years and the most common reason is – lack of innovation. However, there is one more reason behind India`s high rate of startup failure- choosing the wrong MSME startup business.

Here is a list of profitable business ideas that you can start in India with low investment:

  1. Print on Demand Business

Print on Demand business or a POD business is one of the best MSME startup ideas. The principle behind this business is really simple. If you start a business selling unique printed T-shirts, all you have to do is place your order with the vendor, after you receive the order. Once you have received the payment, your vendor will send the T-shirt to the customer.

You can start selling stylish hoodies, T-shirts, and customer tote bags. You do not need to invest in stock or maintain a warehouse, and profit will be all yours. The average time to start this business will take 3 to 5 days.

  1. Flipping Business

There are so many times that we purchase used cars or furniture that is in very good condition. This not only helps us to save few bucks but also serves its purpose. Earlier it used to be thrift shops, however, today, it is a full-fledged business.

With the help of websites such as OLX and other websites, you can easily start this business.  If you have the great sense to see the right value of a used product, you can make good profits by reselling or flipping it online. It is one of the best MSME Startup ideas in India that requires from no to very minimum investment.

  1. Adventure Activity Organizer

If you are an adventurer and want to take the offbeat industry to build a startup, you can become a hiker, trekker, or simply organize adventure activities. You can become a certified mountaineer by taking one month of training in India.

Once you complete the training, you become a certified organizer and can start taking people out on adventure hikes. Today, people, especially millennials are more inclined towards exploring local places. This has opened new business opportunities for tourism. They are more than willing to pay premium prices if a good experience is promised. However, becoming a professional hiker or trekker requires some necessary training and fitness levels.

If you want to spend the rest of your lives amidst the beautiful places in India, this MSME startup idea is best suited for you.

  1. Dance Coaching Classes

Are you passionate about dance? Do you love dancing? Do you have killer moves that make everyone fall in love with your dancing skills? If the answer is yes, then you can open a dance coaching class.

It is an age-old form of entertainment, and nowadays it is highly commercialized. It also offers lucrative opportunities to those who want to pursue this field as their full-time career. However, before opening a dance coaching class, it is best to decide which type of clients you would like to teach. Also, it would be wise to decide the genre of the dance.

  1. Organic Farming

Organic farming is a brilliant MSME startup idea in India. The awareness regarding health and nutrition has made today`s generation more food-conscious. So, if you have land, you can think about starting organic farming. You can either study about it from an Institute or can take a professional`s advice before starting the business.

There are lots of MSME startup ideas that you can start in India as they are in great demand and require minimum requirements. You can use one of the ideas we have mentioned above to kick-start your entrepreneurial journey.

You can also take the ‘Everything about Entrepreneurship’ course from Bada Business to gain in-depth knowledge about how to set up a startup from the scratch.

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MSME

Bank of Maharashtra Aims To Resolve About 25 Stressed MSME Loans Under Pre-Packaged Insolvency Resolution Process

Mumbai, April 24: In a bid to help the stressed micro, small and medium enterprise (MSME) sector, the State-owned Bank of Maharashtra is looking out to roll out a plan at resolving 20-25 stressed MSME accounts under the pre-packaged insolvency resolution process. The news was announced by a senior bank official, a report by PTI said. Earlier this month, the government had introduced a pre-packaged insolvency resolution process for stressed MSMEs by amending the insolvency law.

With the coronavirus pandemic, several sectors have taken a major hit. Bank of Maharashtra’s general manager (credit – large and mid-corporate, MSME) Sanjay Rudra said with the outbreak of the COVID-19 crisis, the stress on hospitality, luxury retail, tour operators, lodging and restaurant operators has increased considerably. “I expect around 20-25 stressed MSME accounts to be resolved under the pre-packaged insolvency resolution regime in the coming months,” he said.

Rudra said this during a webinar organised by MVIRDC World Trade Center, Mumbai and All India Association of Industries.

Here’s how to stressed MSME would benefit:

  1. Under a pre-packaged process, main stakeholders such as creditors and shareholders come together to identify a prospective buyer and negotiate a resolution plan before approaching the National Company Law Tribunal (NCLT).
  2. Rudra said under the pre-packaged insolvency resolution system, the government has given an opportunity for MSMEs to resolve their stress at an early stage while holding control over their business.
  3. “Now, MSMEs should maintain complete transparency in the whole resolution process to regain trust and confidence of lenders,” Rudra said.

Meanwhile, AZB & Partners cofounder Bahram N Vakil said MSME promoters should file for resolution with the NCLT only after having a robust base plan. According to a report by PTI, Vakil said that if the promoters could come out with a resolution plan with a minimum possible haircut for operational creditors and if it is also acceptable to the committee of creditors, then the chances of such plans being challenged in the Swiss challenge auction are less.

 

 

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MSME

Women-Led MSMEs To Get Major Boost As IFC Proposes To Lend Loan Up to $150 Million to Bajaj Finance

Women Entrepreneurs in India (Photo Credits: Pixabay)

Chennai, April 23: In a bid to boost the startup ecosystem in India and help the women-led MSMEs in the country, the International Finance Corporation (IFC) part of the World Bank Group has proposed to loan up to $150 million to Bajaj Finance Ltd.

Under the new initiative, Bajaj Finance will increase its lending to MSME segment to about $600 million. According to details by IFC, the proposed $150 million senior loan for up to five years to Bajaj Finance will enable the company to expand its lending to micro, small and medium enterprises (MSME) and women-owned MSMEs.

Bajaj Finance, which is headquartered in Pune is part of the Bajaj Group,  which is the third-largest non-banking finance company (NBFC) in India. The firm has $4.9 billion equity base and $22.3 billion asset base as of December 31, 2020, IFC said.

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MSME

Digitalisation To Play Key Role in Growth and Development of MSME Sector in India, Says Nitin Gadkari

Union MSME Minister Nitin Gadkari. (Photo Credit: PIB)
Union MSME Minister Nitin Gadkari. (Photo Credit: PIB)

With an aim to development of small businesses in the country, digitalization across areas like marketing and manufacturing would play a critical role, Micro, Small and Medium Enterprises Minister Nitin Gadkari said. The Minister also emphasised the need for technologies that can help expand economically viable MSMEs in the rural and tribal areas across the country. He also pointed out that MSMEs account for 30 percent of India’s GDP, 48 percent of the exports and have created 11 crore jobs. The government aims to take this to 40 percent GDP contribution, 60 percent exports, and create 5 crore new jobs.

“Digitalisation in MSMEs is the most important subject…digitalisation is a solution by which we can make our system transparent and time-bound,” he said at an event held by Microsoft. In his address, Gadkari noted that marketing is an important arena for MSMEs and a number of small companies that have started marketing online are seeing excellent results. He added that digitalization can play an important role for the manufacturing sector in enhancing processes, he said, urging the tech sector to collaborate with MSMEs to help them in these processes. He said the most important agenda for the government is development of MSMEs in the rural, agricultural, tribal areas and 115 aspirational districts.

“This area is where GDP contribution is very negligible…So we need to find technology which is useful for making economically viable MSMEs in the village, rural, agricultural and tribal area,” he noted. He added that while these areas have raw materials, a digital system that is result-oriented can be brought in that will create a win-win situation for all.

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Business motivation Business Startup Ideas Startup Webinar

How to host a successful webinar? Top 3 Impactful ways to Host a Webinar that your Audience will Love!

Webinars are dime a dozen. The webinars have flooded the internet over the past few years. And according to a report by Content Marketing Institute, “more than 60% of the digital marketers are currently using webinars as part of their marketing strategies.”

As successful webinars especially for startups are becoming one of the most effective and profitable ways of attracting potential customers, more marketers are beginning to take advantage of them.

Many of you will find it unbelievable. But do a quick Google search for the term “webinar” and you will be presented with more than thousands of results. You will feel like you have entered into a webinar jungle. But the key is to not get lost in the webinar jungle just yet.

There is a reason why the concept of the webinar is becoming increasingly successful and popular. And out of all, the primary one is- that they WORK!

However, there is a catch. A webinar becomes successful only if done correctly. And guess what, the road is far from easy!

Boring, bland, and beige- most of the webinars are just that. When was the last time you attend a webinar that was exciting, engaging, and informative- all at the same time?

A successful webinar can convert visitors and subscribers into real customers because they have already signed up for it and looking for exactly what you have promised to deliver. People love practical guidance because it helps them.

So if you are looking to host a successful webinar for your business startup, here are the top three most essential and effective ways to have one:

  1. Quality Content is Paramount

If you have decided to host a webinar, of course, you are interested in sales. After all, you are not shedding money for a bunch of free leads to watch your webinar for no reason. However, focusing too much on the end sales and not enough on content is one of the biggest mistakes that people make.

Content is imperative to make a webinar successful. Good quality content is imperative. And you cannot sacrifice with it. Do not ever compromise with the quality for the sake of quantity, speed, or a potential sale. It Never Works!

So how can you create engaging content without ever sacrificing the quality?

There are three components and three simple ways to do it. And to make it easier for you, we are revealing them all, right here.

a). Presentation– Does your webinar looks professional? Do you have a speedy internet connection? What is in the background behind you? Have you practiced sufficiently? Your users will judge your webinar on visual appeal.

Also, it is essential to remain mindful of your customers while creating content. If you are marketing to a less professional audience, less professional materials will resonate more with them.

b). Storytelling– Do you think you are an entertaining storyteller? Can you present your content clearly and concisely? If yes, then you are good to go! If you struggle in this area, you can also hire a ghostwriter or a copywriter to assist you in your webinar production.

c). Interaction- Last, but far away from the least is Interaction. Interact with your audience. Answer their questions. Resolve their queries. Provide feedback and your expertise, all in real-time.

Also, do not talk about your product until the very last of your presentation.  Provide great content first, and sell at the very end.

  1. TIMING is ESSENTIAL

Timing is everything! And when it comes to webinars, it is crucial in a couple of ways.

Firstly, decide when you want to host your webinar. Pick a time that will be convenient for you as well as your audience. Secondly, do not start promoting or advertising your webinar a day before. Start advertising about it at least a month before. Also doing a countdown on your webinar is recommended.

Lastly, decide on the length of the webinar. What should be the duration of your webinar? As your audience is busy, you will be taking a chunk of their precious time. Respect it. And try to keep your webinar for 30-60 minutes.

  1. PREPARATION

Prepare, prepare, prepare as this is the most important key to host a successful webinar for startups. This is not the place to miss it.

Pick an appealing and compelling headline. Shoot a short video, reel, or write a short blog to tell people what they can gain and learn in your webinar and, how that knowledge will add value to their life.

Then start advertising it on all your social media channels. Always ensure that the webinar is free and/or it’s a limited-time opportunity. If this is the first time you are hosting a webinar then practice your presentation skills.

Your speech should sound casual, conversational, and natural. Practice it, until you get it right. Do not hesitate to ask for help. You can also take a professional`s help in nailing the webinar.

With the above-mentioned tips, your webinar will be a hit! Have any of your tips to add? We would love to hear them.

If you want to learn how to host a successful webinar for your business startup, you can take our ‘Problem Solving Courses’, where every business challenge has been provided with practical and easy solutions.

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MSME

MSME Sector will Battle Ongoing COVID-19 Wave with Conviction & Lead India to Positive Growth Trajectory, Says Union Minister Nitin Gadkari

Nitin Gadkari (Photo Credits: Facebook)

Union MSME Minister Nitin Gadkari has said that he is confident that the firms in the micro, small and medium sector will fight the second wave of coronavirus pandemic with conviction, leading the country to a positive growth trajectory. Gadkari also added that the MSME sector battled the first wave of COVID-19 outbreak with great resilience and came out with strong growth projections.” MSMEs in India: Govt Aims To Raise MSME Sector’s Share in GDP to 40% From the Current 30% To Benefit Rural Poor, Says Nitin Gadkari.

Union MSME Minister said, “As a country, we battled the first wave of COVID-19 with great resilience and came out with strong growth projections. And I’m confident in the ability of the industry and MSME sector to battle the ongoing wave with similar conviction and lead India to a positive growth trajectory.” MSME Sector in India Has Huge Potential To Become World’s Largest Manufacturing Hub, Says Nitin Gadkari.

While addressing an event organised by the Amazon India, Nitin Gadkari said that the Indian MSMEs have a great opportunity of getting integrated with the global supply chain as various countries across the globe are looking to diversify their supply chain out of China.

He added that to enhance the competitiveness of the Indian MSMEs, both on national and global level, technology is a critical factor. “We need to ensure that digital transformation of India’s MSME sector takes place that enables them to capitalise on India’s current opportunity,” said Union MSME Minister Nitin Gadkari.

In May last year, amid the coronavirus pandemic, the government had introduced an Emergency Credit Line Guarantee Scheme, to help the struggling MSMEs back on their feet. This scheme was a part of the Rs 20 lakh crore package that was brought forward and executed by our finance minister Nirmala Sitharaman to repair the damage that has been done to this sector in the light of COVID-19.

Nitin Gadkari had earlier said that contribution of the Micro, Small and Medium Enterprise sector in the overall Indian economy, the coming years, will be enhanced to 40 per cent. Currently the firms in the Micro, Small and Medium sector contributes around 30 per cent in the overall gross domestic product in the country. Nitin Gadkari added that the works to increase export from the firms in MSME sector are in progress.

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MSME

Emergency Credit Line Guarantee Scheme 2.0 Now Extended to SMA-1 Borrowers

ECLGS Now Applicable to SMA-1 | Representational Image
ECLGS Now Applicable to SMA-1 | Representational Image

The Department of Financial Services said in a tweet that the scope of Emergency Credit Line Guarantee Scheme (ECLGS) 2.0 has now been extended to cover the Special Mention Accounts- 1 (SMA). The DFS took to Twitter and wrote, “Scope of ECLGS 2.0 expanded! SMA-1 borrowers in the healthcare sector and 26 other high stress sectors (as identified by the Kamath Committee) are now eligible under ECLGS 2.0.” The Emergency Credit Line Guarantee Scheme 2.0 was launched by the government to help the business, especially firms in the micro, small and medium sector in wake of coronavirus pandemic last year. Emergency Credit Line Guarantee Scheme: What is ECLGS? Are You Eligible? Know All About It.

The scheme comprises all micro, small and medium borrowers accounts with combined outstanding loans across all MLIs (member lending institution) of up to Rs 50 crore in any sector and up to Rs 500 crore in respect of borrowers in the hospitality sector, travel and tourism sector and leisure and sporting sector and classified as regular, Special Mention Accounts-0 or Special Mention Accounts-1 as on February 29, 2020, according to the scheme’s website. MSME Credit Moves Towards Pre-Pandemic Levels, Witnesses a Growth of 5.7%: Report.

The Special Mention Accounts (SMA) are those which are exhibiting signs of incipient stress resulting in the borrowers defaulting in timely servicing of their debt and borrowing obligations, though the accounts have not yet been classified as Non Performing Assets (NPAs) according to the guidelines issued by the Reserve Bank of India. In the case of Special Mention Accounts-1, the overdue period is between 31 to 60 days.

The amount of Emergency Credit line to be extended to Business Enterprises or the firms in the micro, small and medium enterprises would be upto 20 per cent of total outstanding as on Feb 29,2020. The interest rate charged on such borrowing is capped at 9.25 per cent for banks and 14 per cent for the Non-Banking Financial Corporations (NBFCs). It has a maximum tenure of four years from the date of disbursement and the moratorium period on the principle amount is 12 months.