Scheme for Assistance to Micro, Small and Medium Enterprises (MSME): Assistance for Raising Capital through SME Exchange

Scheme for Assistance to Micro, Small and Medium Enterprises (MSME): Assistance for Raising Capital through SME Exchange

The “Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)” introduced by the Industries and Mines Department of Gujarat is designed to transform the state into a prominent global business center. This initiative focuses on promoting sustainable manufacturing, enhancing the growth of MSMEs, and boosting export competitiveness.

Overview of the Scheme

This initiative, known as the “Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)”, serves as a comprehensive framework launched by the Industries and Mines Department in Gujarat. Its primary objective is to empower the thriving MSME sector, which plays a crucial role in job creation, contributing significantly to the state’s GDP and exports. The scheme is valid from August 7, 2020, to August 6, 2025, aiming to support entrepreneurs and fortify MSMEs, thereby enhancing their global competitiveness. A key component of this scheme, “Assistance for Raising Capital through SME Exchange”, provides reimbursement for costs incurred in the fundraising process through the SME Exchange.

Advantages of the Scheme

• Financial Support: MSMEs can receive a reimbursement of 25% of the costs associated with raising capital through the SME Exchange, with a maximum limit of ₹5,00,000.
• Equity Capital Assistance: This initiative aids MSMEs in acquiring equity capital essential for business growth and expansion.
• Promotion for Listing: The scheme encourages MSMEs to list on the SME Exchange, thereby enhancing their visibility and credibility in the market.

Eligibility Criteria

• The enterprise must hold registration as an MSME at the time of its listing.
• It should have successfully raised equity capital through the SME Exchange.
• The application must be submitted within one year from the listing date.
• Fundraising must comply with the scheme approved by the SME Exchange.

Application Process

The application process is conducted online through the Investor Facilitation Portal (IFP).

Registration Steps:

1. Access the Investor Facilitation Portal (IFP) and click on “New Investor Registration” to obtain the registration form.
2. Complete the Registration Form and click “Submit”.
3. Confirm your email ID by following the link sent to your registered email address.
4. Upon verification, your registration will be successful.

Post-Registration Steps:

1. Return to the Investor Facilitation Portal (IFP) and click on “Login”.
2. Input the email address and password used during registration.
3. Click the “Login” button to enter your account.
4. Provide the required details and mandatory documents pertaining to your business to finalize the application process.

Definitions and Important Terms

Micro, Small, and Medium Enterprise: An enterprise that meets the criteria defined under the MSME Development Act, 2006, and has received acknowledgment through “Udyog Aadhaar Memorandum / Udyam Registration”.

New Enterprise: Defined as an MSME that has completed Udyog Aadhar / Udyam Registration as mandated by the Government of India and has initiated commercial production within the operational period of the scheme.

Existing Enterprise: Refers to an MSME that commenced commercial production prior to the announcement date of the scheme.

Investment and Expansion Definitions

Expansion: Refers to an existing or new enterprise that has increased its gross fixed capital investment by at least 50%, with a minimum of 60% of this investment directed towards plant and machinery essential for the expansion.

Gross Fixed Capital Investment (GFCI): This term denotes the investment made in buildings, machinery, utilities, tools, equipment, and other assets (excluding land) required for producing the end product.

• Forward Integration: Investment in GFCI for products that serve as raw materials for the enterprise.
• Backward Integration: Investment in GFCI aimed at enhancing the value of the end product.
• Diversification: Investment in GFCI for products that differ from the end product of the enterprise.

Term Loan Explanation

Term Loan: A term loan is a loan issued by financial institutions or banks (excluding NBFCs) designated for acquiring GFCI for the enterprise. Only the amount disbursed will be taken into account for the incentives provided under this scheme.

Pipeline Enterprises

Enterprises that have received their first loan disbursement as a preliminary step but were unable to commence commercial production by August 7, 2020, will qualify as pipeline enterprises eligible for incentives under the previous scheme. These enterprises must start commercial production by March 31, 2021. However, those that obtained their first disbursement before August 7, 2020 may choose to opt for the new scheme. Term loan disbursements made during the policy period will be eligible for enterprises that have selected this scheme.

For More Information

For further details, visit the official source: myScheme.gov.in.