What is Micro, Small and Medium Enterprises (MSME)?
Reserve Bank of India has classified vide circular RPCD.PLNFS. BC No.63/06.02.31/2006-07 dated April 4, 2007, various constituents of MSME sector on the basis of its investments in Plant and Machinery. Briefly the same is reproduced as under -
MSME constitutes companies & individuals involved in both manufacturing and Service Sector.
Manufacturing Sector
Micro Enterprises – Any entity that is engaged in the process of manufacturing and has investment in plant and machinery not exceeding Rs.25 Lacs.
Small Enterprises – Any entity that is engaged in the process of manufacturing and has investment in plant and machinery exceeding Rs.25 Lacs but not exceeding Rs.5 Crores.
Medium Enterprises – Any entity that is engaged in the process of manufacturing and has investment in plant and machinery exceeding Rs.5 Crores but not exceeding Rs.10 Crores.
Service Sector
i. A micro enterprise is an enterprise where the investment in equipment does not exceed Rs.10 lakh;
ii. A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs.2 crore; and
iii. A medium enterprise is an enterprise where the investment in equipment is more than Rs.2 crore but does not exceed Rs.5 crore.
In Paras Capfin, we believe that one way to move the small enterprise to a profitable and sustainable ventureto have funding sources and ability to scale over a period of time. Paras Capfin provides funding to Small Enterprises for their loan requirements, giving them a sustainable business, and a way to grow to a scalable model.
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