Why most businesses, startups trying to register as MSMEs may not get loans

As small businesses and start-ups line up to register as micro, small and medium enterprises (MSMEs), most do not stand to benefit from the government’s relief package, say officials.

The government had last month announced loans worth Rs 3 trillion for an estimated 4.5 million MSMEs that are facing a liquidity crunch since last year.

While the term loans — that are collateral-free and automatic — have been made available till October 31, only businesses that have outstanding loans of up to Rs 25 crore would be eligible.

This saw a surge in start-ups and small businesses across the country