5 Reasons to Register an MSME Certificate

MSME explodes as Micro, Small and Medium enterprises which are termed to be the backbone of any economy. They are often termed as “the engine of growth” for INDIA. MSME Registration in India brings various benefits to the constituents and the owner of these Small-Scale Industries, which are governed by the Ministry of Micro, Small and Medium Enterprises and the benefits are can be clearly picked from the Central legislation relating to registration of MSME certificate and incidental thereto which is titled as “The Micro, Small & Medium Enterprises Development (MSMED) Act, 2006”.

Register of MSME certificate brings about various advantages and benefits, some of which are discussed below:[i]

  1. Reserved certain products for MSME only:

Reservation policy is one of the most vital benefits given to the enterprises who register for MSME certificate in India in the form of a policy under this sector, which are provided in the MSMED Act. This is to ensure that the MSME sector is not affected by the stiff competition in the market either from the domestic factories or the foreign manufacturers. In lieu of the same, the central government has given exclusive and protective rights to manufacture certain products only to this sector of enterprises. Under the Government Stores Purchase Program, the central government has reserved the purchase of more than 300 products exclusively manufactured and produced from this sector.

For example, wooden furniture and fixtures, pickles, bangles, ground nut oil, mustard oil, bread, jute, brakes and clutches for automobile corporations, and others are the goods which are reserved to be manufactured by the MSME’s and the government is duty-bound to purchase from you, but only if you have an MSME Registration Certificate.

  1. Entrepreneurial Memorandum policy:

Filing of Entrepreneurial Memorandum is mandatory for enterprises engaged in the manufacturing process where as it is optional for enterprises engaged in rendering services. The banks are directed by the Reserve bank of India to allocate certain percentage of their lending to priority sectors like agriculture, Micro, small and medium sized enterprises, loans to poor students for their education, etc. This ensures that MSME could get loans to establish their business and makes easy for them to sustain as well as compete with other firms, because they have low capital to invest, therefore, it helps such enterprises to flourish and increase “Ease of doing business in India”. However, medium sized enterprises do not fall under priority sector as they are financially sound. So, filing of entrepreneurial memorandum ensures the MSME enterprises get the benefit lending from banks, in any case.

Furthermore, this is the obligation on the part of banks, whereas, next benefit relates to the duty of the banks in certain cases. This is only provided to the enterprises who register for MSME certificate in India.

  1. Credit Guarantee Fund Trust Scheme for Micro and Small Sized Enterprises:

Micro and Small Sized enterprise have right to avail a loan up to ₹50 lakhs without setting forth or mortgaging any collateral. Since the micro and small companies are run by the persons who have deficient capital to set-up company and have no other option for their survival, and are termed as deprived, the RBI has directed banks to sanction collateral-free loans to such enterprises. This can only be availed by showing Registered MSME certificate.

  1. Capital Aid for Technological Upgradation Scheme for MSME’S:

Some MSME’s may not be able to use their resources to full potential due to lack of the sophisticated and modern technology which is to be required for effective usage of those. The government, under the Capital Aid for technological upgradation scheme, helps these enterprises upgrade their equipment/machines/tools through latest technology by helping them get low-interest loan from banks, as well as, government provides fund to MSME’s for upgradation and buying of modern technologies.

  1. MSME market development assistance for Micro and Small enterprises:

Apart from the reserved products that government has promised to buy from these MSMEs, they are given marketing assistance in terms of concessions, subsidies and developmental aid even to those products which are manufactured by them, which do not fall under the purview of Reservation Policy. For example, cotton yarns, biscuits, textile, and other products.


As Micro, Small and Medium sized enterprises (MSMEs) are considered to be the building blocks for any developed or a developing country, they are being given every possible benefit so as to make them sustain, flourish and compete with others devoid of any economic conditions. Also, the government has made it compulsory for large corporations to buy certain intermediary or furnished raw products only from these MSME’s. A Certificate via MSME Registration in India is required, because the benefits offered to them especially in India are huge in terms of support system given to them by both the central and state government, as Indian government policy is based on Socialistic pattern. The government also supplies trained professionals to help the owners of MSMEs to learn to run, and operate the enterprise efficiently as well as effectively, to utilize the resources with the help of new technology without leading to its wastage and to maintain financial records in a systematic manner, and so on. For better understanding contact experts or legal advisors. To know more in depth details and benefits about this, please refer to Company Vakil and their specialised experts will be happy to guide you through to get your MSME Registration Certificate today.