Technology for MSMEs: The Udyam Assist Platform (UAP) launched earlier this month by the MSME Ministry to register informal micro enterprises has the potential to bring around 5 crore such informal micro units into the formal ambit and benefit under priority sector lending by banks, said a report by the State Bank of India (SBI) on Monday. UAP is essentially a formalisation project by the MSME ministry with SIDBI as its implementing agency to complement the Udyam registration portal of the ministry for MSMEs. The portal was inaugurated with the registration of 8 lakh micro enterprises.
“The number of GST registrations in India is about 1.40 crore whereas the current MSME units registered under the Udyam Certification is about 1.33 crore, which ideally should be equivalent to 1.40 crores. However, it is not because many micro units may not have been able to register as MSME due to paperwork involved and thus remained out of the MSME ambit,” the report on MSME sector post Covid authored by SBI’s Group Chief Economic Adviser Soumya Kanti Ghosh said.
The report analysed that the gap between estimated micro units in the country and the registered ones on the Udyam portal was around 5.01 crore units. However, the UAP portal “should have significant ramifications” in registering informal micro units in the country.
“If we go by the 2015-16 survey (National Sample Survey 73rd round), states like West Bengal, Uttar Pradesh, Tamil Nadu, Karnataka and Andhra Pradesh could benefit with around 2.6 crore registrations of informal micro enterprises. Nudging them into the ambit of formal credit mechanism will result in smaller firms that are mostly self-employed to get registered and will boost employment,” Ghosh wrote.
UAP as a digital platform will require financial institutions such as banks or NBFCs, etc., to share data of their informal micro enterprise customers to register them on the Udyam registration portal and generate the registration number along with an Udyam assist certificate (UAC). Importantly, the registered 8 lakh micro units are among the beneficiaries of the government’s scheme for street vendors PM SVANidhi scheme,” a source aware of the scheme had told FE Aspire. The scheme provides for a collateral-free working capital loan of up to Rs 10,000 in order to bring street vendors under the banking ambit.
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