The FaMe A journey of facilitation
Edition: #2 April 2024
About FaMeTN:
We are the Bureau for Facilitating MSMEs of Tamil Nadu (FaMeTN), an organisation under the MSME Department, Government of Tamil Nadu. We support MSMEs with access to finance and markets, and nudge them along the path of sustainability. The FaMe Newsletter is a quarterly one, and through this newsletter we hope to create a greater conversation with you.
A word from the MD
Thiru L. Nirmal Raj, I.A.S. Managing Director, FaMeTN
In this second edition of The FaMe, I’m proud to highlight the success of the Tamil Nadu Global Investors Meet 2024 (TNGIM2024) and the participation of our MSMEs from across the state. These MSMEs are crucial in integrating Tamil Nadu into the global supply chain, and their involvement at TNGIM2024 showcased their capabilities and contributed to the event’s global recognition.
Tamil Nadu has long been a leader in international trade since time immemorial, and the Government is committed to advancing this legacy through strategic initiatives like the Global Investors Meet 2024. By prioritising the inclusion of MSMEs at this event, we reinforce their essential role in our economic framework and highlight the Government of Tamil Nadu’s dedication to achieving the ambitious vision of a one trillion-dollar economy by 2030.
At TNGIM2024, the Geographical Indication (GI) Pavilion showcased the rich diversity of the GI products from across the state, which was immensely appreciated by all.
The International Reverse Buyer Seller Meet was a success, bringing together 38 foreign buyers from across 23 countries and 370 MSMEs from across Tamil Nadu. 73 MSMEs became first-time exporters, generating orders worth ₹16.42 crore out of the total orders worth ₹42.60 crore. Additionally, panel discussions and sectoral pavilions showcased the potential of our entrepreneurs and the product diversity within our MSME sector, highlighting their capabilities and innovation. These initiatives collectively represented the noteworthy achievements of the MSME Department of Tamil Nadu.
As we press on, we understand the journey ahead requires reflection and action. This edition addresses the need for finances to ensure the smooth operation of MSMEs and answers common questions that MSMEs ask us.
Our department remains steadfast in our commitment to MSMEs, guiding them towards local and global recognition.
worth of sponsorship was provided to 102 MSMEs and 22 associations. 1.8 Cr
2,230 Cr
worth of invoices discounted for 1,524 MSMEs and 98 PSEs were onboarded on TNTReDS.
251
MSMEs facilitated through various trade exhibitions and fairs since 2022.
District Investment Conclave
Prior to the Tamil Nadu Global Investors Meet 2024 (TNGIM2024), District Investment Conclaves were conducted across all 38 districts of Tamil Nadu, leading to the signing of 5,068 MoUs by investors, generating investments worth ₹63,573.11 crore and creating employment to 2.51 lakh people across the state.
No. of MoUs signed 5,068 No. of jobs generated 2,51,660
The Hon’ble Minister for MSME, Govt of Tamil Nadu, Thiru T. M. Anbarasan, addressing the gathering at the District Investment Conclave in Chennai, Tamil Nadu.
The Secretary to the Government, MSME Department, Govt of Tamil Nadu, Tmt. Archana Patnaik, I.A.S. felicitates the Hon’ble Minister for MSME, Govt of Tamil Nadu, Thiru T. M. Anbarasan, at the District Investment Conclave in Chengalpattu, Tamil Nadu.
The Hon’ble Minister for MSME, Govt of Tamil Nadu, Thiru T. M. Anbarasan, addressing the gathering at the District Investment Conclave in Kancheepuram, Tamil Nadu.
Tamil Nadu Global Investors Meet 2024
THE YIELD OF A THRIVING MSME ECOSYSTEM
The District-wise Investment Conclaves led up brilliantly to TNGIM2024.
Tamil Nadu has a thriving MSME ecosystem, which is one of the reasons for Tamil Nadu being India’s 2nd largest state economy. Investors from around the world favour the state for its well established industrial ecosystem that spans the entire spectrum of industrial sectors. With MSMEs from automobile components to medical device parts, Tamil Nadu supports myriad industries that cater to India and the world.
Supported by a robust MSME ecosystem, the Govt of Tamil Nadu organised the TNGIM2024 on the 7th and 8th of January 2024 to expand the state’s industrial development to new dimensions.
TNGIM2024 brought together investors, thought leaders, policymakers, and academia to shape a future leadership role for the state as it progresses towards a trillion-dollar economy in a sustainable and inclusive environment.
The Hon’ble Minister for MSME, Govt of Tamil Nadu, Thiru T. M. Anbarasan, presents the Investment Memoranda of Understanding (MoUs) to the Hon’ble Chief Minister of Tamil Nadu, Thiru M. K. Stalin at the valedictory ceremony of TNGIM 2024.
International Reverse Buyer Seller Meet
The International Reverse Buyer-Seller Meet was organised by FaMeTN in collaboration with the Federation of Indian Export Organisations (FIEO). 38 buyers from across 23 countries participated in the meet and received orders worth ₹42.60 crore from our MSMEs, of which ₹16.42 crore were generated from 73 first-time MSME exporters.
Sectoral Pavilion
25 MSMEs from the following sectors participated in the TNGIM2024 by setting up stalls in the sectoral pavilion:
1. Auto Components (Including EV).
2. Aerospace and Defence.
3. Pharma and Medical Devices.
4. Technical Textiles.
5. Food Processing.
Panel Discussion
FUTURE-READY MSMEs: DRIVING TAMIL NADU’S COMPETITIVE EDGE
A panel discussion on the topic ‘Future-ready MSMEs: Driving Tamil Nadu’s competitive edge’ comprised distinguished entrepreneurs and representatives from the industry and Government. The panel discussion elicited the active participation of the eminent panellists and the audience, predominantly MSMEs. The panellists drew attention to the need for MSMEs to leave their comfort zones and explore new opportunities. They also urged the MSMEs to adopt and embrace technology and sustainability and keep pace with the changing market requirements.
GI Pavilion
Tamil Nadu has the highest number of GI-tagged products in India (58). FaMeTN set up the GI Pavilion at the TNGIM2024 to showcase this rich and diverse platform of GI-tagged products across the state. FaMeTN’s vision was to elevate the treasures of Tamil Nadu to the global stage.
The Pavilion brought to life the iconic ‘Angadi Theru’ market street, a haven where visitors and investors could touch, interact and experience the splendour of Tamil Nadu’s GI products. An unforgettable experience was curated and created for visitors to experience the magical rhythms of live music and witness live demonstrations of traditional arts like Kancheepuram Silk Saree weaving, Manamadurai Pottery making, Arumbavur and Kallakurichi Wood Carving and Mahabalipuram Stone Sculpting in action. The GI Pavilion was an ode to the rich heritage and culture of Tamil Nadu and a celebration of the finest treasures of the State.
Scan the QR code to access Tamil Nadu’s GI tag products!
Thiru T. M. Anbarasan, Hon’ble Minister for MSME, along with Tmt. Archana Patnaik, I.A.S., Secretary, MSME Department and Thiru C. Samayamoorthy, I.A.S., Commissioner of Tourism, visited the GI Pavilion at the TNGIM2024.
Thiru Shiv Das Meena, I.A.S., Chief Secretary, Govt of Tamil Nadu, and Tmt. Kakarla Usha, I.A.S., Principal Secretary, Housing & Urban Development visited the GI Pavilion at TNGIM2024 and experienced the products while interacting with the MSMEs stationed at the Pavilion.
Thiru E. V. Velu, Hon’ble Minister for Public Works, and Thiru. S. Regupathy, Hon’ble Minister for Law.
Lord Tariq Ahmad, Hon’ble Minister of State, United Kingdom (UK) and the Chief Guest of TNGIM2024 valedictory ceremony, visited the GI Pavilion. He was keen to know about the cultural heritage of all the GI-tagged products.
Tmt. Archana Patnaik, I.A.S., Secretary, MSME Department, Tmt. S. Madumathi, I.A.S., MD, TANSIDCO, Tmt. Grace Pachuau, I.A.S., Additional Commissioner, Industries and Commerce, along with SIDCO and ICDIC officials.
Thiru Arun Roy, I.A.S., Secretary, Industries, Investment Promotion & Commerce Department.
Thiru L. Nirmal Raj, I.A.S., Industries Commissioner and Director of Industries and Commerce, interacted with the officials from the British Deputy High Commission and highlighted the features of the Pavilion.
Thiru M. S. Shanmugam, I.A.S., Secretary-III to the CM, and Tmt. Anu George, I.A.S., Secretary-IV to the CM.
The TNTReDS journey: Enhancing the finance potential of MSMEs in Tamil Nadu.
Tamil Nadu Trade Receivables Discounting System (TNTReDS) is an Enterprise Resource Platform (ERP) that optimises invoice receivables for MSMEs. A game changer in facilitating working capital for MSMEs, TNTReDS is enabled by a team of Business Facilitation Officers (BFOs) from FaMeTN. Here are a few questions and answers to help you learn about FaMeTN’s journey to make TNTReDS a successful platform.
WHAT ARE TReDS AND TNTReDS? HOW DO THEY SUPPORT MSMEs?
Since 2014, the Reserve Bank of India (RBI) has regulated the Trade Receivables Discounting System (TReDS), an initiative to facilitate the discounting of trade receivables of Micro, Small and Medium Enterprises (MSMEs). TReDS is a payment system authorised under the Payments and Settlements Act (PSS Act) 2007 and licensed by RBI.
The effective functioning of TReDS led the Govt of Tamil Nadu to create the Tamil Nadu Trade Receivables Discounting System (TNTReDS) to benefit the MSMEs of Tamil Nadu. TNTReDS platform is mandated for all Tamil Nadu Public Sector Entities (PSEs). TNTReDS ensures faster access to working capital for MSMEs while ensuring PSEs have adequate time to process payments. Since its launch by the Hon’ble Chief Minister of Tamil Nadu, Thiru M.K. Stalin, on 25th August 2022, invoices worth ₹2,230.73 crore have been disbursed, 98 PSEs and 1,524 MSMEs have been onboarded in TNTReDS.
Once an MSME gets its invoice approved by the buyer, it is uploaded onto the TReDS platform.
A financial institution comes forward to discount the MSME invoice, i.e. the MSME can get a loan for the invoice amount.
The actual amount is collected by the financier from the buyer on a later due date.
The highest and lowest interest rates are displayed so the MSME can decide.
HOW DOES THE TNTReDS PLATFORM FUNCTION?
The TNTReDS platform operates with the active involvement of both MSMEs and PSEs at every stage of the process. The platform sends notifications to buyers and sellers to ensure transparency and timely action. When an MSME uploads an invoice for the goods or services provided to a PSE on TNTReDS, the PSE verifies the order and approves the invoice. Once approved, the invoice is sent to the TReDS platform for discounting. Financiers then bid to discount the invoice at varying rates of interest. The MSME selects the financier that offers the lowest interest rate to discount the invoice. The proceeds are disbursed to the MSME upon discounting within the due date. The seller is obligated to repay the financiers within 180 days from the date of discounting. The entire Management Information System (MIS) flows into the TReDS platform.
HOW ARE PSEs ONBOARDED ONTO THE TNTReDS?
As TNTReDS complies with Government Orders (GO) 237 and 173 issued in 2021 and 2022 by the Govt of Tamil Nadu, onboarding PSEs to the TReDS platform involves nodal officers working with other departments. The MSME Department, Govt of Tamil Nadu, appointed over 60 first-line officers (BFOs) to work on onboarding PSEs in the TNTReDS platform.
WHAT IS THE PLAN AHEAD?
For short-term goals, FaMeTN is looking at enabling flexible due dates where some PSEs are willing to make payments much earlier than 180 days. In the long run, there is a need for a business process re-engineering in all PSEs. One challenge we faced was integrating systems between various departments- we had to collect over 12 documents from each of the 130 departments. Streamlining MSME procurement and payment processes is necessary for the transparency of operations. Despite being a slow process, it has begun to show visible institutional change.
HOW WERE MSMEs ONBOARDED ONTO THE TNTReDS?
Vendor camps at every PSE and spot registrations eased the onboarding process for PSEs. Frequent follow-ups supported a great deal in onboarding PSEs with inadequate documents. FaMeTN conducted over 100 camps with all PSEs across six months.
The primary concern for MSMEs was paying interest rates for 180 days. The BFOs from FaMeTN explained to MSMEs that the interest is a safety net that ensures quick payment access in case of an unprecedented delay. Hesitant at the initial stages, MSMEs have now become accustomed to TNTReDS and understand the value of TNTReDS in ensuring working capital needs. MSMEs get their payment within 48 hours of the date of approval of their invoices, with competitive rates of interest.
“TNTReDS has relieved us from our financial pressure and given us the confidence to plan our financial decisions ahead of time. During Diwali 2023, we had to provide bonuses for our employees, and TNTReDS came to our rescue by providing the required working capital.
- Thiru V. Srinivasan Hindustan Heavy Electricals PVT Ltd. Coimbatore, Tamil Nadu.
“Only with the assistance of TNTReDS are we able to realise our profits. TNTReDS is a blessing for MSMEs. I thank the Govt of Tamil Nadu for creating a platform like TNTReDS to release our receivables.
- Thiru Suresh, NM Industries. Hosur, Krishnagiri, Tamil Nadu.
In 2020, the RBI mandated that all PSEs with more than ₹500 crore turnover register on TReDS. The Govt of Tamil Nadu extended and implemented this mandate to all of its PSEs. Since the launch of TNTReDS in 2022, 98 PSEs and 1,524 MSMEs have been onboarded in Tamil Nadu, generating a revenue of ₹2,230.73 crore for MSMEs. TNTReDS goes beyond registrations of PSEs, facilitating MSMEs’ access to finance while paving the way for transparent and accountable governance.
Answers unlocked: Expert solutions to your queries.
How do I know that I am an MSME?
You are a Micro, Small and Medium Enterprise (MSME) if your investment ranges up to ₹50 crore and your turnover ranges up to ₹250 crore. In the category of MSME, there are three classifications:
Micro Enterprise: If your investment is up to ₹1 crore and your turnover is up to ₹5 crore.
Small Enterprise: If your investment is up to ₹10 crore and your turnover is up to ₹50 crore.
Medium Enterprise: If your investment is up to ₹50 crore and your turnover is up to ₹250 crore.
Can I access MSME loans for service sector enterprises?
Yes, you can access MSME loans if your enterprise belongs to the service sector. MSME loans are applicable even for trading sector enterprises. The only condition is that your enterprise should fall into the micro, small or medium enterprise category. Here are some of the schemes that the Govt of Tamil Nadu provides for service sector enterprises:
1. Unemployed Youth Employment Generation Programme (UYEGP)
2. Prime Minister’s Employment Generation Programme (PMEGP)
What is the CIBIL score?
Credit Information Bureau of India Ltd (CIBIL) is a privately owned organisation that provides a summary of your credit history. Bank members of CIBIL analyse your credit history before providing you with a loan. The score is derived using the credit history in the CIBIL Report [Credit Information Report (CIR)]. Your CIBIL score starts with 1,000 and reduces with every problem in the repayment process. Enterprises with a CIBIL score of 600 and above have greater chances of getting bank loans. A CIR does not contain details of your savings, investments or fixed deposits.
What is the maximum age for getting business loans?
The maximum age for availing of Government schemes is 55 years.
Is UDYAM registration compulsory to access Government facilities?
Yes. UDYAM registration is compulsory to access Government facilities. An MSME can access various Government schemes and support with UDYAM registration. You can register in UDYAM at your local District Industries Centre (DIC) or with the link: udyamregistration.gov.in
How can I access an MSME loan?
If your enterprise comes under the category of Micro, Small or Medium Enterprise, you can apply for an MSME loan in two ways:
i. Direct loans from banks.
ii. Bank loans with the support of subsidy schemes of the Govt of Tamil Nadu and the Govt of India.
I am a school dropout and want to start a business. Will the Govt of Tamil Nadu provide financial support?
It depends on the enterprise that you would like to set up. The Government schemes require the beneficiary to have passed the 8th standard in school education. Banks require educational qualifications depending on the nature of the enterprise.
What is a project report? How do I prepare it?
The project report is the blueprint for your enterprise, a foundation for your future. Preparing a project report is vital for you to succeed as an entrepreneur. A project report involves a detailed analysis of the market, finance and other crucial enterprise starting parameters.
A project report contains the following parameters:
• Introduction about the entrepreneur.
• Specific project idea (Ex: Manufacturing lightweight drones with eco-friendly materials).
• Category-wise list of finance requirements.
• The procedure of repaying the loan commitments.
• Project feasibility (Bankability, technical feasibility and economic viability).
After my subsidy is approved, will the subsidy be added to my account?
Yes, the subsidy will be added to your account and will be discounted from the loan amount. Subsidy schemes are of two types: forward and backward subsidy schemes.
Forward subsidy scheme: Your loan amount gets subsidised at the initial stage of loan repayment. Example: Annal Ambedkar Business Champions Scheme (AABCS).
Backward subsidy scheme: Your loan amount gets subsidised at the final stage of the loan repayment. Example: PMEGP and UYEGP.
Thiru. Vanangamudi, Senior Advisor for credit at FaMeTN, brings over 35 years of banking experience to his role. He spearheads a team of credit mentors who guide District Industries Centres (DICs) to facilitate finance for MSMEs. Thiru Vanangamudi also oversees the progress of finance targets set for General Managers at the DICs.
As a part of our initiatives for the FY 2023 - 2024, FaMeTN has facilitated MSMEs to attend International and National Expos to gain new access to markets. Explore some of the expos listed below:
CPSU Exhibition
Around 300 MSMEs participated in the two-day Central Public Sector Undertakings (CPSUs) exhibition, gained insights to develop their enterprises and establish networking opportunities with various PSUs.
International Engineering Sourcing Show (IESS)
FaMeTN facilitated around 70 MSMEs to set up stalls at the IESS, organised by the Engineering Export Promotion Council (EEPC) event.
Indus Food Expo 2024
FaMeTN facilitated MSMEs from Tamil Nadu to participate in the Indus Food Expo 2024, network and share their food & beverage products with potential importers and buyers.
Source India 2024
Around 33 MSMEs participated in the Source India 2024 event, an initiative to create market opportunities for enterprises in the electronics manufacturing sector.
Umagine 2024
FaMeTN set up a pavilion at the Umagine 2024, which attracted students and MSMEs from various industrial sectors to learn about the services offered by the Govt of Tamil Nadu for MSMEs.
Jubilant TN Global Expo & Knowledge Summit ‘24
Jubilant Tamil Nadu fostered networking opportunities for our MSMEs through an international trade exhibition and a business summit.
USA Export Meet
FaMeTN, in collaboration with Entry USA, organised a face-to-face meeting of MSMEs with US export experts to gain insights on exporting their goods to the USA.
MSME GeM onboarding workshop
As a part of its e-commerce initiatives, FaMeTN, in collaboration with Government e-Marketplace (GeM), organised a GeM onboarding workshop. Around 80 MSMEs participated in the workshop, with 20 onboarded on the spot.
8th - 10 th Jan 2024 | India Exposition Mart, Delhi
- 6th March 2024
CODISSIA, Coimbatore
Unlocking Finance through Government Schemes and Subsidies
In line with Tamil Nadu’s pursuit of a one trillion-dollar economy, the Govt of Tamil Nadu recognises the pivotal role that Micro, Small, and Medium Enterprises (MSMEs) play in achieving this goal. The MSME Department, Govt of Tamil Nadu has introduced various schemes and subsidies to set up a thriving MSME ecosystem across the state to achieve this objective.
Scheme Eligibilities
Annal Ambedkar Business Champions Scheme (AABCS)
New Entrepreneur-cumEnterprise Development Scheme (NEEDS)
Prime Minister's Employment Generation Programme (PMEGP)
Unemployed Youth Employment Generation Programme (UYEGP)
Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME)
Capital Subsidy
Back-Ended Interest Subsidy (BEIS)
Tamil Nadu Trade Receivables Discounting System (TNTReDS)
Benefits
Schemes for encouraging new entrepreneurs
• SC/ST-owned enterprises.
• Age limit: Up to 55 years.
• Educational qualification: Not required.
• First-generation entrepreneurs.
• Age limit: 21-45 years (up to 55 for special categories).
• Educational qualification: HSC education.
• Entrepreneurship Development Programme (EDP) training is mandatory.
• Age limit: 18 years and above.
• Education qualification: Not required (projects below ₹5 lakh for services and below ₹10 lakh for manufacturing).
• Entrepreneurship Development Programme (EDP) training is mandatory.
• Only trading enterprises (investment up to ₹15 lakh).
• Age limit: 18-45 years (up to 55 for special categories).
• Education qualification: 8th standard.
• 35% subsidy (up to ₹1.5 crore) for project costs covering land, machinery and computing devices.
• 6% interest subvention for a maximum of 10 years (including 2 years for working capital).
• Capital subsidy up to 25% (up to ₹75 lakh).
• 3% interest subvention.
• Covers manufacturing or service projects from ₹10 lakh to ₹5 crore.
• Subsidies ranging from 15% to 35% (based on location and category).
• Assists projects up to ₹50 lakh (manufacturing) and ₹10 lakh (services).
• 25% individual-based capital subsidy (up to ₹3.75 lakh).
• Promoter’s contribution: 10% of the investment (5% for special category).
Schemes for encouraging set up and expansion of enterprises
• New and existing food processing microenterprises.
• Age limit: 18 years and above.
• Educational qualification: Not required.
• Enterprises looking to setup or expand their scale.
• Special categories: Women, SC/ST, differently abled and transgender entrepreneurs.
• New micro and small manufacturing enterprises.
• Term loans up to specific limits.
MSMEs who supply to the State Public Sector Undertakings (PSUs), municipal corporations and apex cooperatives.
• 35% capital subsidy (capped at ₹10 lakh per unit).
• District Resource Persons assist in application filing and statutory compliance.
• 25% subsidy on plant and machinery costs (up to ₹1.50 crore).
• Additional subsidy for special category, microenterprises, micro and small enterprises scaling up to the next category and eco-friendly technology upgradation.
Back-ended interest subsidy of 5% on term loans for a period of 5 years.
• Payments are processed within 5 days of filling the form in the portal.
• Get up to 90% of payments against invoice raised.
These highlighted schemes offer a starting point to access financial benefits through subsidies. For further knowledge of available opportunities, we recommend visiting the nearest District Industries Centre or FaMeTN office at Guindy, Chennai. Alternatively, you can log on to www.msmetamilnadu.tn.gov.in or www.fametn.in for more information.
1st Floor, SIDCO Corporate Office Building, Guindy, Chennai - 600 032 E-Mail: office@fametn.com
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