Q&A library

My firm is an Uber fleet operator in Kochi. We operate 20 CNG fuelled small cabs exclusively for Uber. Out of 20, 14 vehicles are finance by Oriental Bank of Commerce (Now PNB), first 6 vehicles are from 3 NBFC's. I would like to consolidate finance of these 6 vehicles. Is it possible to get at least 6 months moratorium?
Questioned by Jinesh Mathew, Kerala
COVID-19 and the impending recession have completely changed the risk levels of all loan portfolios. If the loan is under moratorium, then the moratorium period has to cease to avail the consolidated loan from a new financial entity. As companies lay off employees, existing borrowers with retail loans e.g. personal loans, home loans find it harder to make their EMI payments. This results in deterioration of the credit quality of existing retail portfolios. Further, the pool of potential borrowers (of good credit quality) shrinks, making future disbursements of new loans riskier. As a pool of creditworthy MSME and Corporate borrowers shrinks making it harder for banks & NBFCs to find good borrowers to lend to, the large banks with the lowest cost of capital afford to lend only to investment grade corporates operating in sectors not heavily impacted by the impending recession, However the criteria remains is that there needs to be a good credit score. Also, the nature of risk today is determined, not only by the credit history (as it was before COVID), but also by a variety of factors pertaining to the financials of the borrower and the nature of the industry in which they work (applies to SMEs). If you have gold as collateral, you can take a gold loan which is a hassle-free option. Muthoot Fincorp Ltd. has launched a special Gold Loan Scheme for businesses known as "Ashwas Dinam Gold Loan" It’s features are maximum loan value against gold, steady interest rate for 180 days, 24x7 online repayment options, reducing interest on daily payments, etc. The Restart India Pradhan Gold Loan is also another excellent choice for businesses and individuals in the process of restarting their lives. The features are maximum value for gold, loan from Rs 5,00,00, Interest rates from 11.99% and maximum tenure up to 9 Months. https://bit.ly/RISIDBI

Is it necessary to have GST Registration for the MSMEs whose turnover is lesser than 40 lakhs, for selling their products on online platforms like Amazon, Flipkart, Myntra, etc.?
Questioned by Mrs.Chhaya Hitendra Bhagat, Maharashtra
A trader needs to get registered under GST to be able to sell on the online platforms such as Amazon, Flipkart, Myntra etc. Registration under GST is mandatory and the business had to get registered and get a GSTIN. The turnover limit of Rs. 40 / 20 / 10 lakh do not apply on selling online. These platforms also do not allow to register without a GSTIN.A person who already has GSTIN need not take another registration. For registrering you can visit this website:https://reg.gst.gov.in/registration/

I work with government firms but payments are on-hold due to Covid-19 and the future is uncertain. Please guide.
Questioned by Ravi Yadav, Haryana
You can raise a delayed payment complaint on the MSME Helpline which is an initiative of the Indian MSME Helpline Private Limited and is promoted by professionals from national repute. It is a one stop solution for the MSMEs to start/run their business.https://www.msmehelpline.com/.

I am an entrepreneur doing super distribution business of Fast moving consumer goods based out at Nagpur (Maharashtra state) and cover whole of Vidharbha area with a network of about 150 sub-db's under us. I am interested to enhance and diversify with a like-minded organisation, but I am finding it difficult to explore good companies who can be trusted for their ethics and marketing policies. We have an excellent coverage in the rural area and would like to expand, kindly guide.
The best way to reach out to businesses is to go through matured communities. An online matured community is something like network capital and Pushstart. Offline communities include clubs and BNI's ( which are now available online as well). These are the best places to meet business's/business owners who will have a similar entrepreneur mindset.

I'm Shivaraj, a customer of Muthoot FinCorp. I need MSME loan for investing in my shop and I am waiting since last two months for the circular, but haven’t received any information regarding the loan. Kindly assist.
Questioned by SHIVARAJ, Karnataka
To avail an MSME loan, your organisation needs to be registered under MSME. To register please visit https://udyamregistration.gov.in/Government-of-India/Ministry-of-MSME/online-registration.htm

I have an NGO that supports women. I want to set up a training institution and a garment production unit. I hope to create employment oppurtunity for around 1000 women in and around Janagoan town of Telangana state. Can you advice me on the steps I can take to set up this institution and production unit?
Questioned by Thambi Joseph Bandanadam, TELANGANA
Various initiatives have been rolled out by the government for enhancing the technical skills and sensitise rural women with the latest technology in the field of garment making, Centre for Research & Industrial Staff Performance (CRISP), in association with National Research Development Corporation, Government of India, New Delhi had conducted 6 weeks specially designed training programme on Garment Making with CAD for women from rural areas near Bhopal. Please get in touch with CRISP to understand if any such programmes can be planned at your state too. Also the Confederation of Women Entrepreneurs, COWE concentrates on providing training in various skills to needy women throughout Telangana district areas, Hyderabad. COWE concentrates on conducting EDPs, ESDPs, seminars, workshops, COWE marts, awareness programs, to empower women through entrepreneurship by imparting relevant training, counselling and handholding to enhance their skills, through knowledge sharing and advocacy. Also KRITI is an organisation which has been involved in providing skills training for women since 2014, under Project Hunar. Kriti Social Initiatives along with Bashir and Sarwar Babukhan Trust have jointly participated in a program by Telangana State Minority Finance Corporation to provide livelihood opportunities for women from minority communities and also provide skill training. Consider digital marketing like, E-Commerce websites or Apps, especially the social media platforms and shopping ads which may be more beneficial than traditional form of advertising.

Please advise on the financial help available for running UPVC (unplasticized polyvinyl chloride) windows and doors business plan ?
Questioned by Ramesh, Telangana
If you are already registered under MSME, there are loans available under ECGLS or GECL scheme. All the MSME borrower accounts with an outstanding credit of up to Rs.50 crore which were less than or equal to 60 days past due as on February 29th and with an annual turnover of up to Rs. 250 crore, are eligible for GECL funding under the scheme. Also collateral free loans under CGTSME are available to any new or existing small scale manufacturing or service activity. The business unit must be established as a distinct unit. Also the mandatory approvals, certifications, tax registrations need to be obtained in order to avail the credit facility. The business plan needs to be concrete and a well - defined one, with information on model, prospects, cost analysis, projections etc. There are schemes available under MSME in Pradhan Mantri MUDRA Yojana (PMMY), wherein any manufacturing MSME having Udyog Aadhaar Memorandum (UAM) can apply for the assistance under the Scheme. These loans are known as MUDRA loans and has products/ schemes namely Shishu (loan up to 50,000/-)Kishore (loans above 50,000/- and up to 5 lakh), Tarun (5 lakh to 10 lakh). For details visit: http://bit.ly/RIMUDRAAlso collateral loans specific for traders are available from Muthoot Fincorp under the Ashwas Dinam Gold Loan. https://bit.ly/MuthootFincorpADGL

I am a scientist onto making unicycles and have made 2 inventions in eco-friendly transportation. I have submitted 5 entries in "Create the Future Design Contest" organized by NASA. Looking to start a business on the above, need a working partner to help with the marketing of the business plan. Please advise on the financial aid that can be made available?
Questioned by Ravi Shankar Gautam, Bihar
Micro, Small and Medium Enterprise (MSME) loan is the funding support offered by several financial institutions to individuals, MSMEs and Start-up enterprises. A registration in MSME Udyam Portal is important along with the following details.Firstly, there needs to be a detailed and convincing business plan. In case of a private limited company or a limited liability partnership, turnover of the firm should not exceed Rs.25 crore, company should have approval from the Department of Industrial Policy and Promotion (DIPP). The start-up must get patron guarantee from the Indian patent and Trademark Office.The loans that are available are MUDRA Yojana and CGTMSE Scheme. Mudra scheme is categorized under 3 loan schemes named as Shishu, Kishor and Tarun. Under Mudra’s Shishu scheme loan up to Rs.50,000 , under Kishore scheme the amount ranges between Rs. 50000 to Rs.5 lakh and under the Tarun scheme from Rs.5 lakh to Rs.10 lakh. Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE) is another Government initiative that offers funding to MSMEs via financial institutions like banks and NBFCs. Under this scheme first time entrepreneurs and start-up enterprises are majorly benefitted. The loan offered under CGTMSE scheme is collateral free. Also SMILE under (SIDBI ) focuses on covering the financial requirements for new enterprises which are into manufacturing or services sector. The loan amount offered under this scheme is minimum Rs. 10 lakh for equipment finance and Rs.25 lakh for other purposes. However to avail these loans it is essential to have a very good credit score.

We manufacture face masks. What advice can you give us to scale up?
Questioned by alka deore, Maharashtra
The pandemic impact has prompted many of the garment industry to diversify into the mask making business, considering the market demand post the Covid-19 scenario. In order to create demand, for the mask made by your firm, its essential to understand the requirement of the customer, as they may require eco-friendly, environmentally safe cloth masks at an affordable cost. The next step is to reach out to institutions, corporates, residential colonies, schools, colleges and corporate offices, wherein the requirement would be on a recurring basis. Regarding the usage, masks have become a new normal now, therefore it will be present for a reasonable period. Mask is a new and evolving product for the buyers now. However innovation and comfort is key to sustain in this business and customer feedback is essential, since this feedback and tests are important before bulk manufacturingSome feedback on masks from an article in Apparel Resources dated June 24th 2020. Some buyers have shared feedback for the need of extenders to give comfort to the wearer, elastic ear loops instead of fabric ear loops, use of interlining in between two fabric layers to keep more firmness, having the upper portion of the mask tighter as compared to the lower, so that warm breath exhales more from the bottom than from the top, thus minimising chances of glasses getting fogged and misty for people who wear spectacles. Our domestic market is gaining a lot for masks and renowned brands like Adidas India and Wildcraft have taken a lead and are capturing the market aggressively. The usage of online payment platform will also help to ensure prompt cash flow.

We are the developer of a 4 MW small hydroelectric project in the Idukki district of Kerala. Because of the present situation, we are finding it very difficult to secure debt finance for this project. Could you please help us in this regard? (About the project: The total project cost is Rs. 27.8 Cr and estimated annual revenue is Rs. 6.55 Cr. Present status: All statutory clearances secured, land acquisition and dam construction completed)
Questioned by Rakesh Roy, Kerala
The application for availing subsidy can be submitted through the online portal (www.mnre.gov.in). A large number of banking and non-banking institutions are financing renewable energy projects significantly. Small hydropower projects, i.e. those with a maximum output of less than 10 MW, often have additional features that make them less profitable and thus more difficult to finance than larger projects. Revenue of the project is small and consequently the economic feasibility is very cost-sensitive and the risk is higher when compared to larger projects. In your case, a bank or other investment institution shall provide the majority of the funding needed. Banks can provide financing at more favorable terms than can be obtained on the private market. Private agencies such as commercial banks and insurance companies also provide funding for hydro projects. However, their interest rates will be higher and payback time will be shorter. To obtain a loan, you must convince the bank/FI with the economic feasibility of the project and provide security. Loans shall be secured against assets or property owned by you. As the lender's interests are well secured, the need for a tight network of contracts to control risk can be relaxed, making the financing structure more flexible. You may visit your nearest bank / reputed NBFC for opting suitable loan scheme.

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