Over the last half-century, the micro, small, and medium enterprises (MSME) sector has gained popularity as a thriving and crucial sector of the Indian economy.
In addition to providing significant employment opportunities at relatively lower capital costs than large industries, MSMEs also contribute to industrializing rural areas and reducing regional imbalances. This ensures equitable distribution of national wealth and income. To simplify the MSME registration process, the Udyog Aadhar Memorandum was launched.
Udyog Aadhar consists of a self-certification form, in which an MSME self-claims its legal existence, its bank account details, and the promoter/owner’s Aadhaar details, among other information. Based on the declaration, the MSME will be allotted a unique identification number called Udyog Aadhar Number.
Udyog Aadhar Eligibility
Entities classified as MSMEs based on their investment in plant and machinery and turnover are eligible to apply for a Udyog Aadhar.
| Classification | Investment limit | Turnover limit |
| Micro | Up to one crore | Up to five crores |
| Small | One crore to ten crores | Five crores to fifty crores |
| Medium | Ten crores to twenty crores | Fifty crores to hundred crores |
The registration will enable the units/enterprises to seek information and apply online for various services offered by all ministries and departments. An MSME Udyog Aadhar loan is one such benefit. Udyog Aadhar loans aim at promoting MSME businesses. These business loans are disbursed by banks, government channels, and financial institutions. With Udyog Aadhar, you can take out a business loan quickly, with minimal paperwork, and without having to pledge any collateral.
The Khadi and Village Industries Commission (KVIC) administers government subsidies in the manufacturing sector, having a maximum project cost of ₹ 25 lakhs and in the business/service sector up to ₹ 10 lakhs. This is disbursed through designated banks for eventual transfer to the beneficiaries.
For individual MSEs, the Credit Guarantee Trust Fund for Micro & Small Enterprises (CGT SME) offers collateral-free business loans up to ₹ 100 lakhs on payment of a guarantee fee to the bank.
A concessional interest rate of 4% is offered to the institutions under the ISEC Scheme for working capital. The purpose of this program is to fund khadi institutions. Through KVIC, the central government pays the lending banks the difference between the actual lending rate and 4%.
It is challenging to meet the financing needs of every business in the country through a central agency, given that it exists in every nook and cranny. Hence, the Udyog Aadhar loans are provided through public and private banks, non-banking financial institutions, the Micro Units Development and Refinance Agency, small-scale industries, and other such financial institutions.
A broad network of service providers allows the government to satisfy the needs of millions of small businesses across the country.
Any MSME can benefit significantly from Udyog Aadhaar. As an SME owner, if you need financing, you will need a Udyog Aadhaar, which serves as proof of your company’s identity. You can apply for Aadhar Udyog online and take advantage of various financial schemes.
To assist Indian entrepreneurs in expanding their business, various banks offer collateral-free loans to new small businesses within the MSME segment. The business loan eligibility criteria are modest, thereby showing the willingness of lenders to provide a helping hand in boosting MSME sector growth.
Small business loans are available up to Rs 75 lakh, and they can be tailored to suit your business needs. Structured repayment terms at highly competitive interest rates allow you to repay your business loan EMI based on your cash flow. You can also calculate your EMI by using the business loan EMI calculator available on your lender’s website.
A journey of a thousand miles starts with a single step. If you are an entrepreneur seeking to ramp up your small business, get yourself registered under Udyog Aadhar today!