#msme lending

[secretstalks]

Indian Bank is open to lending to MSMEs under special mention accounts, says CEO Shanti Lal Jain

Indian Bank is set to extend loans to micro, small, and medium enterprises (MSMEs) in the Special Mention Account (SMA) category, following a government guarantee announced by Finance Minister Nirmala Sitharaman in the Union Budget 2024. In an exclusive interview, Managing Director and CEO Shanti Lal Jain expressed the bank’s commitment, stating, “We’re open to lending, especially to our customers in SMA 1 and SMA 2, who are eligible for this guarantee.”

The Finance Minister introduced a mechanism aimed at ensuring ongoing bank credit for MSMEs facing stress. This initiative is designed to support MSMEs when they reach the SMA stage due to uncontrollable circumstances, preventing them from falling into non-performing asset (NPA) categories.

Sitharaman noted that this credit support would be backed by a government-sponsored fund, enhancing banks' internal capacities to evaluate MSMEs for credit. She emphasized that a new credit assessment model will be developed, focusing on the digital footprints of MSMEs, rather than relying solely on traditional asset or turnover metrics, making it more inclusive for businesses without formal accounting systems.

Regarding the collection efficiency of MSMEs for the April–June quarter, Jain attributed the decline to several factors, including heat waves, general elections, and seasonal variations. He reported a 2% decrease in collection efficiency in the MSME segment, both year-over-year and sequentially, contributing to a 1% overall drop in collection efficiency from 96% to 95%.

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[m1nxt]

The Rise of Fintech: How Technology is Revolutionising MSME Lending

Micro, Small, and Medium Enterprises (MSMEs) are the backbone of most economies, contributing significantly to employment and economic growth. However, despite their importance, MSMEs have historically faced significant challenges in accessing finance. Traditional banks often find it risky or unprofitable to lend to these businesses due to a lack of credit history, collateral, or perceived instability. This is where financial technology, or fintech, has stepped in, transforming the landscape of MSME lending.

The challenges faced by MSMEs in traditional landing

High interest rates: MSMEs often face exorbitant interest rates due to their perceived risk profile.

Complex documentation: The paperwork involved in traditional lending can be overwhelming and time-consuming.

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[aifyit]

Unlocking the Potential of Corporate Lending in India: Trends and Challenges

Hey everyone! I'm excited to share my latest blog post on "Corporate Lending in India". Check it out on my website now and let me know your thoughts in the comments. #corporatelending #fintech

Corporate lending is an essential aspect of the Indian financial system, facilitating business growth and development. The Indian corporate lending market has witnessed significant changes in recent years, driven by factors such as increasing government spending on infrastructure, rising demand for credit from MSMEs, and the adoption of digital technologies. In this article, we will explore the…

[nidhipujari]

Working Procedure Of B2B Wholesale Distributor

Buy Now Pay Later for Distributors

Distributors typically buy a lot of goods from manufacturers and sell them to certain merchants. Distributors, though, frequently struggle financially to make such significant product purchases.

However, relying on modern financial services for payments, such as Buy Now Pay Later, can greatly assist them. In order to help distributors manage their working capital requirements and grow their operations, KredX offers Buy Now Pay Later for distributors.

An individual or company who buys goods from producers and resells them to retailers, assemblers, or other producers is known as a B2B wholesale distributor. Through the supply chain, they move these goods.

The lack of distributors eliminates the necessity for the manufacturer or producer to speak with any retailers.

Working Procedure Of B2B Wholesale Distributor

B2B wholesale distributors often don't sell to consumers; instead, they have a niche business or area of expertise and want to provide advantages to companies that want to collaborate with them.

A B2B wholesale distributor who specializes in a certain industry, like apparel or automotive parts, can benefit from the opportunity to buy more and receive volume discounts.

B2B wholesale distributors might thus build customer relationships with a particular segment by working in that area. Business purchasers, on the other hand, can receive things for less than the going rate when they buy straight from the manufacturer.

Conclusion

Therefore, those engaged in B2B distribution who want to grow their companies in order to keep more customers (retailers) and boost sales can choose to use Buy Now Pay Later for Distributors. Accepting this cutting-edge payment method would assist retailers and distributors develop while ensuring the seamless functioning of B2C sectors at the next level.

[onepaisamore]

NBFCs and Rule-Based Lending in India

The Indian NBFC sector has been an important pillar of credit growth and an aide to the banks, since long. Especially, in areas like micro-finance, small medium enterprises, factoring, and infrastructure, NBFCs are able to cater to niches that banks may not be able to, purely by virtue of their size and risk protocols. The total credit extended by NBFCs has jumped from approximately one-sixth of…

[tezzcapital]

Why is an MSME Loan the Ideal Financing Solution for Small Business Owners?

Starting and running a small business can be an exciting endeavor, but it often comes with its fair share of financial challenges. As a small business owner, you may find yourself in need of capital to fuel growth, purchase inventory, expand operations, or manage cash flow fluctuations. In such situations, securing financing becomes crucial for the sustainability and success of your business. Among the various financing options available, an MSME loan emerges as an ideal solution tailored to meet the specific needs of small business owners. In this blog, we will explore the advantages of MSME loans and how they can help small-scale industries and businesses thrive.

Understanding MSME Loans

MSME loans, also known as Micro, Small, and Medium Enterprises loans, are financial products designed to support micro, small, and medium-sized businesses in India. These loans are offered by various financial institutions, including banks, non-banking financial companies (NBFCs), and online lenders. The primary objective of MSME loans is to provide accessible and affordable financing to small business owners, helping them overcome financial hurdles and achieve growth.

Advantages of MSME Loans:

Tailored for Small Businesses: Unlike traditional loans that may have stringent eligibility criteria and high collateral requirements, MSME loans are specifically designed for small businesses. They take into account the unique needs and challenges faced by small business owners and offer more flexible terms.

Quick and Convenient Processing: MSME loans often have a streamlined application and approval process, allowing small business owners to access funds quickly. In many cases, the application can be completed online, reducing paperwork and saving time.

Collateral-free Options: Many MSME loans are offered without the need for collateral, making them accessible to small business owners who may not have significant assets to pledge as security.

Competitive Interest Rates: Financial institutions recognize the importance of supporting small businesses and offer competitive interest rates on MSME loans, making them more affordable for borrowers.

Improved Cash Flow Management: MSME loans can be used to manage cash flow fluctuations, ensuring that the business has sufficient funds to meet operational expenses and avoid disruptions.

Supports Growth and Expansion: Whether you’re looking to expand your business, invest in new equipment, or open a new location, MSME loans provide the necessary capital to fuel growth initiatives.

Customized Loan Amounts: MSME loans offer a range of loan amounts, allowing small business owners to borrow as per their specific financing needs, without taking on excessive debt.

Boosts Credit Score: Timely repayment of MSME loans helps build a positive credit history, which can further improve the credit score of the business, making it easier to access financing in the future.

How MSME Loans Help Businesses:

Working Capital Management: Many small businesses face challenges in managing their working capital, leading to cash flow issues. MSME loans can be utilized to bridge these gaps and ensure the smooth functioning of day-to-day operations.

Inventory Management: For businesses with seasonal demand fluctuations, maintaining a healthy inventory level can be a struggle. An MSME loan can provide the necessary funds to stock up on inventory during peak periods, allowing businesses to meet customer demands efficiently.

Business Expansion: When opportunities for business expansion arise, having access to timely financing is essential. MSME loans provide the required funds to open new locations, introduce new product lines, or expand existing operations.

Technology Upgrades: In today’s digital age, keeping up with technological advancements is crucial for business competitiveness. MSME loans enable small businesses to invest in modern technology and stay ahead in the market.

Marketing and Promotion: Effective marketing and promotional activities are vital for small businesses to reach their target audience and attract new customers. An MSME loan can be utilized to fund marketing campaigns and boost brand awareness.

Recruitment and Training: As businesses grow, the need for skilled and qualified employees also increases. MSME loans can be used to recruit and train new staff, ensuring that the business operates efficiently and delivers high-quality products or services.

MSME Loan for Small-Scale Industries:

Small-scale industries play a significant role in India’s economic growth and employment generation. However, they often face financial constraints that hinder their expansion and development. MSME loans offer a lifeline to these industries, empowering them with the necessary funds to invest in modern technology, expand production capacities, and explore new markets.

Small Business Funding Solutions:

In conclusion, MSME loans have emerged as the ideal financing solution for small business owners. With their flexible terms, quick processing, and competitive interest rates, MSME loans provide the necessary financial support to address working capital needs, invest in growth opportunities, and overcome various business challenges. For small-scale industries and businesses looking to achieve sustainable growth and success, exploring the benefits of an MSME loan can be a game-changer. Take advantage of this accessible financing option and fuel the growth of your small business with confidence.

Conclusion

In conclusion, MSME loans have proven to be a game-changer for small business owners in India. These financial products offer tailored solutions to address the unique challenges faced by micro, small, and medium-sized enterprises. With advantages such as quick processing, competitive interest rates, and collateral-free options, MSME loans provide accessible and affordable financing to fuel the growth and expansion of small businesses.

The benefits of MSME loans extend beyond immediate financial needs. They support working capital management, inventory control, technology upgrades, marketing initiatives, and recruitment efforts, empowering businesses to operate efficiently and seize growth opportunities. For small-scale industries, MSME loans serve as a lifeline, enabling them to invest in modern technology, expand production capabilities, and explore new markets.

[techminsolutions]

Empowering Micro Enterprises: MSME Minister Launches Rs 20 Lakh Scheme for GST-Exempted Units Under CGTMSE

Transformative Initiative for Informal Micro Enterprises (IMEs) In a groundbreaking move, MSME Minister Narayan Rane has introduced a revolutionary scheme specifically designed for Informal Micro Enterprises (IMEs), with the aim of bolstering their access to credit facilities and alleviating financial constraints. Launched under the esteemed Credit Guarantee Fund Trust for Micro and Small…

[oplinnovate]

https://www.psbloansin59minutes.com/knowledge-hub/peer-to-peer-lending-borrowing-investing

The rise of peer-to-peer lending: a revolutionary approach to borrowing and investing

Discover the revolutionary world of peer-to-peer lending. Borrow and invest like never before with this groundbreaking approach to finance. Join the rise today!

[victorysp]

Today in São Paulo, Brazil, UNSGSA Queen Máxima met with leaders and customers from Dinie, a pioneering fintech that offers embedded lending and digital working capital to MSMEs and merchants on e-commerce platforms. And in a country where less than 5% of startups are founded by women, Dinie is 100% women led. June 5, 2023.

[finmattress]

MSME Registration in Chandigarh: Simplifying the Process for Small Businesses

Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in shaping the Indian economy by providing employment, encouraging innovation, and fostering entrepreneurship. For businesses in Chandigarh and the surrounding areas, MSME registration is essential for unlocking numerous benefits, including subsidies, tax exemptions, and easy access to credit.fin mattress In this guide, we’ll walk you through the MSME registration process in Chandigarh, the associated benefits, and why it’s important for small businesses.

What is MSME Registration?

MSME registration is a government-backed initiative aimed at supporting small businesses by providing them with various incentives and support schemes. It is not mandatory, but highly recommended for businesses to avail themselves of the numerous advantages it offers.

In Chandigarh, just like in the rest of India, businesses falling under the micro, small, or medium categories can register under the MSME Development Act, 2006. The registration is available to both manufacturing and service-based industries, and it’s applicable to startups as well.

Benefits of MSME Registration in Chandigarh

Access to Credit: One of the primary benefits of MSME Registration in Chandigarh is that it makes businesses eligible for priority lending. Banks and financial institutions offer loans to registered MSMEs at lower interest rates, making it easier for small businesses to secure funds without struggling with high interest or stringent terms.

Subsidies and Incentives: MSME-registered businesses can access various government subsidies and incentives, including capital investment subsidies, subsidies for technology upgrades, and market development assistance schemes. These benefits help small businesses lower their operational costs and improve productivity.

Tax Benefits: MSMEs in Chandigarh can avail of a variety of tax incentives and exemptions, such as reduced income tax rates and exemptions from certain direct taxes. This can significantly improve a company’s cash flow, which is critical for small businesses.

Protection Against Delayed Payments: MSME registration provides businesses with protection against delayed payments. The MSME Act ensures that registered businesses receive payments within a specific time frame (usually 45 days). If the buyer delays payment, they are liable to pay compound interest, which helps MSMEs maintain a steady cash flow.

Easier Access to Government Tenders: The government reserves a percentage of its tenders for MSME-registered businesses, giving them an edge over larger corporations. This is especially beneficial for small businesses that might otherwise struggle to compete for contracts with bigger firms.

MSME Registration Process in Chandigarh

The registration process is straightforward and can be done online through the Udyam Registration portal. Here’s a step-by-step guide:

Visit the Udyam Registration Portal: Go to the official government website for MSME registration, which is the udyam registration in chandigarh. The portal is designed to make the process easy and accessible for everyone.

Enter Your Aadhaar Details: The first step is to enter the business owner’s Aadhaar number, as it is required to verify the identity of the applicant. If the business has more than one owner, the details of the authorized person must be entered.

Provide Business Details: After the Aadhaar verification, you will need to fill in details about your business, including the name of the enterprise, its type (manufacturing or service), and the PAN number.

Provide Financial Information: You will be required to enter details about your investment in plant and machinery or equipment. This helps determine whether your business qualifies as micro, small, or medium.

Submit and Receive Your Udyam Registration Certificate: Once all the details have been entered and verified, submit the application. After processing, you will receive your Udyam Registration Certificate, which confirms that your business is now an MSME.

MSME Registration in Panchkula Chandigarh

For businesses operating in both msme registration in mohali chandigarh, the process remains the same. MSME registration in Panchkula Chandigarh follows the same online registration procedure through the Udyam portal. The benefits are also identical, offering easier access to loans, subsidies, and protection against delayed payments.

However, businesses in Panchkula and Chandigarh should also be aware of the local incentives and schemes provided by their respective state governments. The government of Haryana, which governs Panchkula, may offer additional benefits or schemes to encourage small business growth, so it’s essential to stay updated on the latest offerings.

Why Register with Fin Matters?

At Fin Matters, we specialize in helping small businesses navigate the complexities of MSME registration in Chandigarh and Panchkula. Our team of experts understands the local regulations and is committed to making the registration process as smooth as possible for entrepreneurs. Here’s why you should choose Fin Matters:

Expert Guidance: We offer personalized guidance to ensure you meet all the requirements for MSME registration. Our team will handle the paperwork, verify the documents, and ensure your application is processed efficiently.

End-to-End Support: From the initial consultation to the receipt of your Udyam Registration Certificate, Fin Matters provides complete support throughout the registration process.

Local Expertise: With years of experience working with businesses in Chandigarh and Panchkula, we have an in-depth understanding of the local business environment, which allows us to tailor our services to your specific needs.

Faster Processing: Our streamlined approach ensures that your registration is processed quickly, so you can start reaping the benefits of being an MSME-registered business without unnecessary delays.

Affordable Services: We offer cost-effective MSME registration services, making it easier for small businesses to access professional help without breaking the bank.

Documents Required for MSME Registration

Before beginning the registration process, make sure you have the following documents ready:

Aadhaar card of the business owner

PAN card of the business or owner

Business address proof

Bank account details

Details of your business’s investment in plant and machinery or equipment

Information about the number of employees in your business

Having these documents ready will ensure that the registration process goes smoothly and without delays.

Conclusion

MSME registration in panchkula chandigarh is an essential step for small businesses looking to access government incentives, loans, and other benefits. By registering, businesses can secure their financial future and gain a competitive edge in the marketplace. Whether you’re based in Chandigarh or Panchkula, MSME registration offers a wide range of advantages that can help your business grow.

At Fin Matters, we’re here to simplify the registration process and ensure that your business can take full advantage of all the benefits available to MSMEs. Get in touch with us today to learn more about how we can assist you with MSME registration in Chandigarh and Panchkula!This content is tailored for your brand Fin Matters, using simple and SEO-optimized language while ensuring the primary and secondary keywords are naturally integrated. Let me know if you need any adjustments!

[canakulsinghalassociates]

MSME Registration firm In Rohinis

MSME Registration firm In Rohinis

MSME registration in Rohini. We chartered accountant firm in sec 24 Rohini. Are you looking for your business's GST registration, ITR filing, or Tax consultant? Call us and consult to the best CA in Rohini

MSME refers to Micro, Small, and Medium-Sized Enterprises. According to the Micro, Small & Medium Enterprises Development (MSMED) Act of 2006, Micro, Small, Medium Enterprises (MSME), also known as SSI, are classified into two classes:

Manufacturing Industry

For Micro Enterprises: No more than 20 lakh rupees may be invested in equipment and machinery. 

b) For Small Businesses, the maximum amount invested in plant and machinery is 5 crore rupees, but the investment is higher than 20 lakhs.

c) Plant and machinery investments for medium-sized businesses must be more than 5 crore rupees but not more than 10 crore.

Documents Needed for Rohini MSME and SSI Registration: 

1. Aadhaar Card (attached in soft copy)  2. Social Classification (General, OBC, SC, ST) 3. The company or business name  4. Organizational Type (LLP, Pvt. Ltd., Partner, Ownership)  5. PAN Card (Owner/Business/Firm)  6. Address of the Office  Mobile number and email address  8. Bank IFS Code and Account Number (Owner/Firm/Corporate)  9. The primary business activity of the company (your work for the firm)  10. The number of workers  11. Purchasing Plant and Machinery and Equipment 

The Services Industry

A) micro enterprise's equipment investment cannot exceed 10 lakhs.  b) Small Businesses: Equipment investments totaling more than 10 lakhs but less than two crores. c) Medium-Sized Businesses: The amount invested in equipment exceeds two crores but does not surpass five crores.

Advantages of MSME Registration with CA Nakul Singhal Associates (Rohini)

Benefits from Banks: MSMEs are eligible for special schemes designed by banks and other financial institutions because they recognize them. This typically involves lower bank interest rates and priority sector lending, which indicates that there is a strong chance that your company will be approved for a loan. If repayment is delayed, special treatment might also be granted.

Benefits from taxes: Depending on your industry, you can be eligible for an excise tax exemption program or be spared from paying some direct taxes during the early stages of your company.  State Government Benefits: Those that have registered under the MSMED Act typically receive subsidies from their respective states for electricity, taxes, and access to state-run industrial estates. Specifically, most states exempt sales taxes, and produced items are given an advantage in purchasing. advantages of the central government: The loan guarantee program is one of the programs that the central government occasionally offers to assist MSMEs.  The Credit Guarantee Program (CGTMSE).  Credit and the input of income from several sources to support them are two of the biggest challenges small-scale enterprises encounter.

Changes have been made to the Credit Guarantee program, which was created to assist MSME, in increasing its advantages for small traders

The scheme's key components are as follows: 

1. Improving the ideal qualifying loan amount to Rs. 50 lakh from Rs. 25 lakh

2. Lowering the one-time guarantee from 1.5% to 0.75% for loans taken out by MSME in Northeastern India. 

3. Increasing the guarantee's coverage from 75% to 80% for:

 4. Operated by women Small and medium-sized businesses

  5. Microbusinesses, up to a 5 lakh loan amount 

6. Loans taken out in the country's northeast 

7. Lowering the one-time guarantee charge from 1.5% to 0.75% for all loans obtained in North Eastern India. 

BecauseMSMECertificate holders can present their certificate ofMSMEregistration when applying, it has become much easier for these businesses to get licenses, approvals, and registrations from the appropriate authorities in any area.   

As specified in the government scheme and contingent on economic activity, enterprises with anMSMEregistration may benefit from a direct tax exemption for their first year of operation.  

To encourage the participation of small businesses in India, the government has certain bids that are exclusively available toMSMEs.   

Ease of approval from federal and state government agencies; businesses registered asMSMEsare given priority when it comes to government certification and licenses.

Our services:- Accounting And AuditingCompany Audit & ROC FilingGST Compliance & AuditCorporate Law ConsultancyIncome Tax ComplianceFormation of companies under ROCTax Planning & Filing.

[udyamregister]

Udyam Registration Online: A Comprehensive Guide

Udyam Registration is an initiative by the Government of India aimed at promoting small and medium enterprises (SMEs) and encouraging entrepreneurship in the country. With the increasing significance of SMEs in India’s economic landscape, Udyam Registration provides numerous benefits to businesses, including access to credit, government subsidies, and various incentives. This guide will walk you through the process of Udyam Registration online, its benefits, eligibility criteria, and key points to consider.

What is Udyam Registration?

Udyam Registration, launched on July 1, 2020, replaces the previous MSME registration process. The term "Udyam" translates to "enterprise" in Hindi. The registration aims to create a database of small and medium enterprises, helping the government streamline support and resources for these businesses.

Types of Enterprises

Under Udyam Registration, enterprises are classified into three categories based on their investment and annual turnover:

Micro Enterprises:

Investment in plant and machinery: Up to ₹1 crore

Annual turnover: Up to ₹5 crore

Small Enterprises:

Investment in plant and machinery: Up to ₹10 crore

Annual turnover: Up to ₹50 crore

Medium Enterprises:

Investment in plant and machinery: Up to ₹50 crore

Annual turnover: Up to ₹250 crore

Benefits of Udyam Registration

Access to Credit: Registered enterprises can avail loans from banks at lower interest rates and easier terms, facilitating business expansion.

Government Schemes: Udyam-registered businesses are eligible for various government schemes and subsidies aimed at supporting MSMEs.

Priority Sector Lending: Financial institutions prioritize lending to Udyam-registered enterprises, making it easier to secure funds.

Tax Benefits: Registered enterprises may qualify for tax concessions and incentives under various government programs.

Protection Against Delayed Payments: Udyam-registered businesses can seek protection against delayed payments from buyers, ensuring smoother cash flow.

Market Access: Registration enhances credibility and may improve opportunities to participate in government tenders and procurements.

Easy Online Process: The registration process is entirely online, saving time and reducing bureaucratic hurdles.

Eligibility Criteria

To qualify for Udyam Registration, businesses must meet specific criteria:

Type of Business: The enterprise must be a proprietorship, partnership, limited liability partnership (LLP), private limited company, or any other legal entity.

Investment Limits: The business must comply with the investment limits for micro, small, or medium enterprises as specified earlier.

Annual Turnover: The enterprise must adhere to the turnover limits based on its classification.

Self-Declaration: The registration process relies on self-declaration, meaning entrepreneurs need to provide accurate information about their business.

How to Register Online: Step-by-Step Guide

The Udyam Registration process is straightforward and can be completed in a few simple steps:

Step 1: Visit the Udyam Registration Portal

Go to the Udyam Registration portal Ensure you are using a secure internet connection.

Step 2: Select 'Register'

On the homepage, click on the “Register” button. You will be directed to the registration form.

Step 3: Provide Aadhaar Details

Enter your 12-digit Aadhaar number. The Aadhaar number is mandatory for the registration process. If you are a proprietorship, you must provide your personal Aadhaar. For partnerships or companies, the Aadhaar details of the authorized signatory must be provided.

Step 4: Fill in Enterprise Details

Complete the form by providing essential details about your enterprise, including:

Name of the enterprise

Type of enterprise (micro, small, medium)

Investment in plant and machinery

Annual turnover

Other relevant information

Step 5: Self-Declaration

Once all details are filled in, you must provide a self-declaration confirming that the information is accurate and complete. This declaration also includes compliance with the investment and turnover criteria.

Step 6: Submit the Form

After reviewing all entered details, click the “Submit” button. You will receive an acknowledgment receipt after successful submission.

Step 7: Download Udyam Registration Certificate

After processing your application, you can download your Udyam Registration certificate from the portal. The certificate will serve as proof of your registration and can be used to avail various benefits.

Important Points to Remember

Free of Cost: The registration process is entirely free. Beware of any third-party services that may charge you for registration.

Validity: Udyam Registration does not have an expiry date, making it a one-time process as long as your business remains in the same category.

Re-registration: If there are changes in the enterprise’s investment or turnover that move it to a different category, re-registration will be required.

Support and Guidance: Various organizations and government agencies offer support for Udyam Registration. Entrepreneurs can seek assistance if needed.

Conclusion

Udyam re- Registration is a vital step for entrepreneurs looking to establish and grow their businesses in India. By providing various benefits, financial support, and a streamlined process, the initiative aims to bolster the SME sector. Whether you’re a new entrepreneur or an established business owner, Udyam Registration can open doors to opportunities that can significantly enhance your enterprise's growth potential.

[voiceofentrepreneurlife]

Equitas Small Finance Bank deposit growth

Equitas Small Finance Bank fell just short of meeting the asset quality requirements for a universal bank license. In an interview with FE, Managing Director and CEO PN Vasudevan discusses, among other topics, why it is important for Equitas to move beyond its’small finance bank designation. Here are some highlights:

Credit-deposit mismatch is a major concern for large commercial banks. How is this playing out for SFBs?

Despite some confusion surrounding the ‘ small finance bank’ label, we have successfully raised public deposits. People frequently question whether we are a finance company or a true bank and whether their investments are secure, even after seven to eight years of the SFB model. Despite these concerns, we have not faced any difficulties in attracting deposits. Our ability to raise funds has never been limited, as we offer interest rates that are 1-2% higher than those of larger banks.

How have SFBs evolved on the credit side?

A significant trend in the industry is portfolio diversification. When SFB licenses were issued seven to eight years ago, most of us were primarily NBFC microfinance institutions, with 50–90% of our exposure to unsecured microfinance. Transitioning to banks, a crucial change was to increase our secured loan portfolio and reduce unsecured loans to a more balanced level. While the RBI does not specify a required portfolio mix, it is important to maintain a balanced approach to unsecured loans.

Regarding Equitas’ loan book mix:

Our portfolio is well-diversified. Currently, 83% of our loans are secured, and 17% are unsecured (primarily microfinance). Within the secured loans, 38% are small business loans, 25% are commercial vehicle loans, 12% are affordable housing loans, and the remaining 7-8% are allocated to MSMEs and lending to NBFCs. We introduced credit cards in the fourth quarter and are also rolling out personal loans, both of which fall into the unsecured category.

Why did you decide to offer credit cards and personal loans?

Read More-https://voiceofleaders.com/

[udyogaadharnet]

Eligibility Criteria for Udyam Registration

Udyam Registration has emerged as a vital step for micro, small, and medium enterprises (MSMEs) to gain formal recognition in India. Introduced by the Ministry of Micro, Small, and Medium Enterprises, this registration system is designed to simplify the process for MSMEs to avail themselves of various government schemes, benefits, and incentives. Udyam Registration replaces the previous process known as Udyog Aadhaar and serves as an online, paperless, and fully automated system for business registration.

To successfully apply for Udyam Registration, businesses must meet specific eligibility criteria based on various factors, including investment in plant and machinery, annual turnover, and business category. This article explores the detailed eligibility criteria for Udyam Registration and why it is essential for MSMEs across different sectors.

Understanding Udyam Registration

Before diving into the eligibility criteria, it is essential to understand what Udyam Registration is and why it matters. Udyam Registration provides formal recognition to MSMEs in India, allowing them to take advantage of a host of government incentives, subsidies, and schemes aimed at promoting growth and sustainability.

Once registered, businesses receive a unique Udyam Registration Number (URN), which can be used to access benefits like priority sector lending, reduced interest rates on loans, credit-linked capital subsidy schemes, and other advantages. The registration process has been streamlined to ensure that businesses can complete it online without any paperwork, further simplifying the procedure for entrepreneurs.

Categories of MSMEs

The eligibility for Udyam Registration is based on the classification of the business into one of three categories:

Micro Enterprises

Small Enterprises

Medium Enterprises

The government sets different criteria for each category in terms of investment in plant and machinery or equipment and turnover. These categories ensure that businesses of varying sizes receive benefits tailored to their specific needs.

Key Eligibility Criteria for Udyam Registration

To qualify for Udyam Registration, businesses must meet specific investment and turnover criteria, as outlined by the government. These criteria differ depending on whether the business falls under the micro, small, or medium category.

1. Micro Enterprises

Micro-enterprises are the smallest category of MSMEs. To be classified as a micro-enterprise for Udyam Registration, the following conditions must be met:

Investment in Plant and Machinery or Equipment: The investment must not exceed ₹1 crore.

Annual Turnover: The turnover of the business should not exceed ₹5 crore.

Micro-enterprises often include small manufacturers, service providers, and artisans operating on a smaller scale but significantly contributing to the local economy. These businesses benefit greatly from Udyam Registration by gaining access to financial support and subsidies.

2. Small Enterprises

Small enterprises represent the next tier of MSMEs. The eligibility criteria for this category are:

Investment in Plant and Machinery or Equipment: The investment should be more than ₹1 crore but not exceed ₹10 crore.

Annual Turnover: The annual turnover must be more than ₹5 crore but should not exceed ₹50 crore.

Small enterprises include various businesses engaged in manufacturing, retail, and service sectors. Udyam Registration for small enterprises opens doors to a wider range of benefits, including government tenders, tax exemptions, and easier access to credit.

3. Medium Enterprises

Medium enterprises are the largest category under MSMEs. They are vital contributors to industrial and economic growth. The eligibility criteria for medium enterprises are:

Investment in Plant and Machinery or Equipment: The investment must exceed ₹10 crore but should not be more than ₹50 crore.

Annual Turnover: The turnover should be above ₹50 crore but not exceed ₹250 crore.

Medium enterprises are eligible for significant benefits through Udyam Registration, such as subsidies, protection against delayed payments, and various incentives for technological upgrades and innovation.

Additional Criteria and Considerations

Apart from the primary eligibility criteria based on investment and turnover, businesses must also comply with certain other requirements to qualify for Udyam Registration:

1. Form of Business

Udyam Registration is available for businesses operating under various forms, including:

Proprietorships

Partnerships

Limited Liability Partnerships (LLPs)

Private Limited Companies

Public Limited Companies

Hindu Undivided Families (HUFs)

Co-operative Societies

Trusts

There is no restriction based on the legal structure of the business, which means MSMEs from various sectors can apply for Udyam Registration, provided they meet the financial criteria.

2. Adherence to the Revised MSME Definition

The MSME classification based on investment and turnover was revised in 2020. Previously, the classification was solely based on investment, but now turnover is also considered to ensure a more comprehensive evaluation of the business’s scale.

The turnover calculation excludes revenue from exports, ensuring that businesses focused on international markets are not penalized for their success abroad.

3. Single Udyam Registration for Multiple Activities

Businesses involved in multiple activities (manufacturing and services) are required to file a single Udyam Registration. They must declare all their activities during the registration process, but they do not need to register separately for each type of business activity. This provision simplifies the registration process and reduces the administrative burden on entrepreneurs.

4. GST and PAN Requirement

The government has made it mandatory for businesses applying for Udyam Registration to provide their PAN and GSTIN. However, in some cases, businesses not yet registered under GST may still apply for Udyam Registration, but they will need to update their information later.

Advantages of Meeting Udyam Registration Eligibility Criteria

Once an MSME meets the eligibility criteria for Udyam Registration, it can enjoy a multitude of benefits:

Access to Government Schemes: Registered businesses can apply for various MSME-focused government schemes, including financial assistance, subsidies, and grants.

Priority Sector Lending: Udyam-registered businesses are given priority in the disbursement of loans under government-supported lending programs.

Subsidized Rates on Loans: MSMEs can avail themselves of loans at lower interest rates, improving their financial stability.

Tax Benefits: Udyam Registration makes businesses eligible for several tax exemptions and benefits, reducing their overall tax liability.

Protection Against Delayed Payments: The MSME Act provides protection to registered businesses, ensuring timely payments from buyers. In case of delayed payments, the buyer is liable to pay compound interest.

Note: Apply for Print Udyam Certificate through the official portal.

Conclusion

Udyam Registration is a crucial step for micro, small, and medium enterprises to unlock a world of opportunities and government incentives. By meeting the eligibility criteria for Udyam Registration, MSMEs can access financial benefits, priority lending, and a range of subsidies that promote their growth and sustainability. Understanding the investment and turnover thresholds and ensuring compliance with the revised MSME definition are essential for businesses aspiring to register under the Udyam platform.

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Retailer Financing Options

Retailer Financing 

Retailer financing, to put it simply, is a sort of short-term unsecured loan that retail companies provide to their clients. This is a common tool used to control inventories and increase sales, and it is made available to customers with good credit.

At the point of sale, sellers present purchasers with this form of retailer financing. Credit is given to customers for their purchases. Then, they can spread out or postpone payment, simplifying, expediting, and improving their buying experience.

Retailer Financing Options

There is no one method that works for all customers in terms of convenience. The possibilities for paying retailers come in a variety of forms, though. Different kinds of payment methods include:

EMI

When referring to a financing option, an EMI is one in which clients must pay the full amount plus additional interest over a protracted period of time. This most closely resembles a conventional loan, except that a retailer is offering it rather than a conventional finance institution like a bank.

No Fee EMI

As the name implies, this is comparable to an EMI with one important exception: the price of the product is not increased by interest. Instead, this financing strategy only breaks the entire cost into smaller payments due over time.

Get It Now, Pay Later

The financing option known as "Buy Now Pay Later," or "BNPL," has swiftly risen to the top of the list for online retailers. When buying necessities, such as food and medicine, it was typical to use this type of small-scale store financing. Simply said, BNPL enables clients to purchase an item and pay for it later.

This store solution is offered by funding organizations for the mutual advantage of the buyer and the supplier. While vendors receive immediate payment up front without any delays, buyers benefit from the convenience of shopping even when funds are tight. By offering Buy Now Pay Later options, organizations like KredX help shops increase sales and draw in new customers while providing a wonderful shopping experience.

Conclusion

Thus, retail financing has a number of advantages for both buyers and sellers. Customers can be given credit by businesses without having an impact on their working capital. Additionally, it enables them to grow their organization, boost sales, enhance client loyalty, and eliminate inventory more quickly. Additionally, because the financing institution is in charge of payment collection, it is more desirable to a store. Thus, retailer finance offers clients a tempting financing option and ensures retailers have funding.

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Unified Lending Interface (ULI)

The Unified Lending Interface (ULI) is an innovative digital platform by Reserve Bank of India (RBI), designed to streamline the credit appraisal process by enabling the seamless and consent-based flow of digital information between various data service providers and lenders. RBI launched it as pilot project - Public Tech Platform in 2023, now set to launch as Unified Lending Interface.   

How It Works? 

A significant challenge in digital credit delivery is the fragmentation of essential data across various entities, including Central and State governments, Account aggregators, banks, and credit information companies, each operating within separate systems. This fragmentation complicates lenders' ability to efficiently access the comprehensive data required for credit appraisal. As a result, the lending process is often delayed, impeding the timely and seamless execution of rule-based lending, especially in situations where prompt decisions are crucial.   

The Unified Lending Interface (ULI) addresses the challenge of fragmented data by creating a centralized platform that integrates disparate data sources. Through ULI, lenders gain unified access to both financial and non-financial customer data, including critical information such as land records, all through a consent-based system. This streamlined access facilitates a smoother and faster credit appraisal process, accelerating decision-making and ensuring timely credit delivery.  

At the core of ULI's architecture are common and standardized APIs (Application Programming Interface). These APIs are designed with a 'plug and play' approach, making it incredibly easy for lenders to tap into diverse information sources without the usual hassle. 

ULI – What difference does it make in Digital Lending? 

1. Friction-less credit:  

The Unified Lending Interface (ULI) is expected to reduce paperwork and waiting times for loan applications. By minimizing the need for extensive documentation, ULI aims to streamline the process and expedite responses from lenders, ensuring a smoother and more effortless experience for borrowers. 

2. Cutting Down Loan Turnaround Time (TAT): 

By consolidating data from multiple sources, the Unified Lending Interface (ULI) significantly reduces the time needed for credit evaluation. This streamlined approach allows for quicker assessment of loan applications, speeding up the overall loan processing time. As a result, borrowers can expect faster decisions and reduced turnaround times for their credit requests. 

3. Meeting unmet credit needs: 

The Unified Lending Interface (ULI) is expected to address the significant unmet demand for credit in sectors like agriculture and Micro, Small, and Medium Enterprises (MSMEs). By streamlining access to loans and simplifying the application process, ULI will make it easier for these underserved sectors to obtain the financing they need, fostering growth and development. 

4. Seamless and Consent-Driven Data Flow: 

The Unified Lending Interface (ULI) enables a smooth, consent-based transfer of both financial and non-financial data, stored in various silos including state land records. This consolidated , digital data is easily accessible to lenders, allowing for more informed and efficient credit assessments while ensuring borrower consent and data privacy.   

Conclusion:                      

The Unified Lending Interface (ULI) is set to revolutionize India's digital lending ecosystem with its upcoming launch by the Reserve Bank of India (RBI). By creating a centralized, consent-driven platform, ULI aims to overcome the challenges of fragmented data and reduce loan processing times. This initiative promises to enhance the borrower experience and ensure timely credit access for underserved sectors, driving greater financial inclusion and supporting the growth of industries like agriculture and MSMEs.