What Is MSME SAMADHAAN Scheme

What is the MSME Samadhaan Scheme?

The MSME Samadhaan Scheme is an initiative launched by the Government of India to help Micro, Small, and Medium Enterprises (MSMEs) recover delayed payments from their buyers. The scheme, also known as the MSME Delayed Payment Portal, provides a platform where MSMEs can file complaints and resolve disputes regarding delayed payments from buyers, including government departments and public sector enterprises.

The primary objective of MSME Samadhaan is to ensure that MSMEs are paid on time, thus maintaining their cash flow and financial stability. By addressing the issue of delayed payments, the scheme aims to reduce the financial stress faced by small businesses and ensure they receive fair treatment in terms of payments for goods or services provided.

Key Features of the MSME Samadhaan Scheme

1. Resolution of Delayed Payments: The scheme provides MSMEs with a legal framework to file complaints against buyers who have not made payments within the prescribed time. Under the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006, payments for goods and services supplied by MSMEs are to be made within 45 days from the date of acceptance of the goods or services. If payments are delayed beyond this period, the buyer is liable to pay compound interest with monthly rests on the amount due.
2. Online Filing of Complaints: The MSME Samadhaan portal allows MSMEs to file complaints online if their payments are delayed. This digital platform simplifies the process for MSMEs to submit their claims, track the status of their complaints, and monitor the resolution process.
3. MSE Facilitation Councils (MSEFCs): MSME Samadhaan provides a mechanism through Micro and Small Enterprises Facilitation Councils (MSEFCs) for resolving disputes between the supplier (MSME) and buyer. These councils act as intermediaries to help settle the issue and ensure timely payment. If the issue remains unresolved, the MSEFC can also act as an arbitrator.
4. Compounding Interest for Delayed Payments: According to the MSMED Act, if a buyer delays payment beyond 45 days, they are required to pay compound interest, which is three times the bank rate notified by the Reserve Bank of India (RBI). This provision helps discourage buyers from delaying payments and compensates MSMEs for the financial losses incurred due to the delayed payment.
5. Public Display of Defaulting Buyers: The MSME Samadhaan portal publicly displays the details of complaints against defaulting buyers. This creates accountability and puts pressure on buyers to settle their dues promptly. Government departments and public sector enterprises are especially encouraged to ensure they comply with the payment terms to avoid being listed as defaulters.

Objectives of MSME Samadhaan Scheme

The MSME Samadhaan Scheme was designed with the following objectives:

• To Ensure Timely Payments: The scheme aims to ensure that MSMEs receive timely payments from their buyers to maintain healthy cash flow and financial stability.
• To Reduce Financial Stress: Delayed payments often cause significant financial stress for small businesses. The scheme helps MSMEs recover their dues efficiently and reduces the financial burden caused by delayed payments.
• To Improve Transparency and Accountability: By publicly listing defaulting buyers, the scheme promotes transparency and accountability, encouraging buyers to honor payment terms and respect MSMEs’ financial rights.
• To Support MSME Growth: MSMEs are a vital part of the Indian economy, contributing to employment generation and economic growth. Ensuring timely payments to MSMEs helps them grow and expand, thereby boosting the overall economy.

How MSME Samadhaan Works

1. Registration: MSMEs can register on the MSME Samadhaan portal using their Udyam Registration Number (URN). This number is issued to MSMEs when they register under the Udyam Registration, which is the government’s official registration for MSMEs.
2. Filing the Complaint: After registering, MSMEs can file complaints regarding delayed payments. The complaint includes details about the buyer, the transaction, and the amount due. Supporting documents such as invoices, purchase orders, and communication records can also be uploaded.
3. Processing by the Facilitation Council: The complaint is forwarded to the MSE Facilitation Council (MSEFC), which examines the case and may call for discussions between the MSME and the buyer. The MSEFC works to resolve the dispute amicably.
4. Arbitration or Legal Proceedings: If the dispute remains unresolved through discussions, the MSEFC can initiate arbitration or conciliation proceedings to resolve the issue. The council’s decision is legally binding, and the buyer is required to settle the payment along with interest as per the provisions of the MSMED Act.
5. Tracking the Complaint: MSMEs can track the status of their complaint on the MSME Samadhaan portal, providing them with real-time updates on the progress of the case.

Importance of MSME Samadhaan for Businesses

The MSME Samadhaan Scheme plays a crucial role in the Indian business ecosystem, especially for MSMEs, in the following ways:

a. Maintaining Cash Flow

MSMEs often operate with limited financial resources, and delayed payments can severely affect their cash flow. By facilitating quicker resolution of payment disputes, MSME Samadhaan helps businesses maintain steady cash flow, which is essential for day-to-day operations.

b. Supporting Business Growth

When MSMEs receive timely payments, they can reinvest the funds into their businesses, hire more employees, expand operations, and purchase inventory or raw materials. This enables MSMEs to grow and compete effectively in the market.

c. Reducing Financial Stress

Delayed payments can lead to financial stress for business owners, making it difficult to pay salaries, manage overheads, and fulfill obligations to other creditors. The MSME Samadhaan Scheme provides businesses with a formal platform to recover their dues without going through lengthy legal procedures.

d. Strengthening MSMEs’ Position

The scheme provides legal backing to MSMEs, ensuring that their financial rights are respected. Buyers, especially large enterprises, are held accountable for delaying payments, empowering MSMEs in their business dealings.

e. Boosting Transparency and Trust

Publicly displaying the names of defaulting buyers fosters a more transparent business environment, encouraging better relationships between MSMEs and their customers. This also helps build trust and encourages compliance with payment terms.

How to Register and File a Complaint on the MSME SAMADHAAN Portal

1. Visit the MSME Samadhaan Portal: Access the official MSME Samadhaan portal through the following link: https://samadhaan.msme.gov.in.
2. Register with Udyam Number: You need your Udyam Registration Number (URN) to sign up on the portal. Make sure you have completed your Udyam registration if you haven’t already.
3. File the Complaint: Once registered, navigate to the “File a Complaint” section and provide the required details about the delayed payment, including buyer information, the amount owed, and supporting documents like invoices and contracts.
4. Track Complaint Status: After submitting your complaint, you can track its status online and receive updates on the progress of your case.
5. Engage with the MSEFC: In case the MSEFC initiates proceedings, be ready to participate in discussions, arbitration, or conciliation sessions to resolve the dispute.

Conclusion

The MSME Samadhaan Scheme is a powerful tool designed to safeguard the financial interests of MSMEs by addressing the issue of delayed payments. By providing a structured platform for filing complaints, engaging with buyers, and ensuring the payment of dues, the scheme helps MSMEs maintain healthy cash flow and reduce financial stress. For any MSME facing delays in receiving payments, MSME Samadhaan is an effective and essential mechanism for resolving disputes and protecting their business.