MSME Interview Questions & Answers

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MSME Interview Questions & Answers

Looking for some opportunities in MSME? Either as a fresher or an experienced there always MSME jobs available for those skilled and passionate individuals in large numbers in either manufacturing enterprises or service enterprises. There are openings for different positions from junior or fresher level to the chief posts as junior engineer, product designer, marketing head, senior software developer, stock manager, chief finance officer, architects, etc across almost every location from small rural areas to cities and top metros, you name it they have it like Hyderabad, Vijayawada, Vizag, Pune, Mumbai, Gujarat, Surat, Bangalore, Mysore and many more as such. Visit wisdom jobs for more details about the job openings and subscribe to the mailing list to get notified of any latest opportunities. Go through MSME jobs interview questions and answers page for an easy and smooth interview round.

MSME Interview Questions

MSME Interview Questions
    1. Question 1. What Is The Support Available For Collateral Free Borrowing?

      Answer :

      The Ministry of MSME, Government of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to the MSE sector without the need for collaterals/ third party guarantees. The main objective of the scheme is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed.The Credit Guarantee scheme (CGS) seeks to reassure the lender that, in the event of an MSE unit, which availed collateral- free credit facilities, fails to discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the lender up to 85 per cent of the outstanding amount in default. The CGTMSE would provide cover for credit facility up to Rs. 100 lakh which have been extended by lending institutions without any collateral security and /or third party guarantees. A guarantee and annual service fee is charged by the CGTMSE to avail of the guarantee cover. Presently the guarantee fee and annual service charges are to be borne by the borrower.

    2. Question 2. What Is The Support Available For Cluster Development?

      Answer :

      The Ministry is implementing the Micro and Small Enterprises – Cluster Development Programme (MSE-CDP) wherein support is provided for Diagnostic Study; Soft Interventions like general awareness, counseling, motivation and trust building, exposure visits, market development including exports, participation in seminars, workshops and training programmes on technology upgradation etc; Hard Interventions ilike setting up of Common Facility Centers (Common Production/Processing Centre, Design Centre, Testing Centre etc.) and creation/upgradation of infrastructural facilities in the new/existing industrial areas/ clusters of MOSEs.

    3. Question 3. What Is The Support Available For Skill Development?

      Answer :

      The Ministry conducts various types of training programme through its various organisations for self employment as well as wage employment. The training programmes are primarily focused to promote self employment in the country. Thus all type of programmes have input which provide necessary information and skills to a trainee to enable him to establish his own micro or a small enterprises. The programmes include two week Entrepreneurship Development Programme (EDP), Six Week Entrepreneurship Skill Development Programme (ESDP). One weak Management Development Programme (MDP), One Day Industrial Motivation Campaign(IMC) etc. For Monitoring of the programme a web based system has been developed where coordinator of the programme is bound to feed all details of trainees including his photo and phone no. on the website. The same will be linked to the call centre of Ministry where real time feedback is obtained from trainees.

    4. Question 4. What Benefits Do The Tool Rooms Of Ministry Of Msme Provide To Msmes?

      Answer :

      Tool Rooms are equipped with state-of-the-art machinery & equipment. They are engaged in designing and manufacturing of quality tools, which are necessary for producing quality products, and improve the competitiveness of MSMEs in national and international markets. They also conduct training programmes to provide skilled manpower to industries specially MSMEs. The placement of trainees trained in Tool Room is more than 90%. There are 18 Autonomous Bodies (10 MSME Tool Rooms and 8 Technology Development Centres) under DC (MSME), a list of Tool Rooms and Technology Development Centres is available in the website Download The file ( bytes) in Icon.

    5. Question 5. What Support Is Provided By The Ministry To Improve Quality Of Products Produced In Msme Sector?

      Answer :

      The TEQUP scheme envisages another activity, namely, Product Quality Certification. The main objective of this scheme is to encourage SMEs to Acquire Product Certification Licenses from National / International Bodies , thereby improving their competitiveness. The primary objective of this activity is to provide subsidy to MSME units towards the expenditure incurred by them for obtaining product certification licenses from National / International standardization Bodies. Under this Activity, MSME manufacturing units will be provided subsidy to the extent of 75% of the actual expenditure, towards licensing of product to National/International Standards. The maximum GOI assistance allowed per MSME is Rs.1.5 lakh for obtaining product licensing /Marking to National Standards and Rs. 2.0 lakh for obtaining product licensing /Marking to International standards. One MSME unit can apply only once under the scheme period.

    6. Question 6. What Support Is Provided By The Ministry To Improve Design Of Products Produced In Msme Sector?

      Answer :

      The Ministry implements the Design Clinic Scheme for Design Expertise to Micro, Small and Medium Enterprises (MSME) Sector is to improve the design of the product to meet global challenges and compete with similar products domestically and internationally. It is launched to benefit SMEs by creating a dynamic platform to provide expert solutions to real time Design problems and add value to existing products. The goal of this scheme is to help MSME manufacturing industries move up the value chain by switching the production mode from original equipment manufacturing to original design manufacturing and hence original brand manufacturing. In the Design Clinic scheme, the value additions to an idea or a concept are imparted through interaction at a lesser cost to a specific industry/sector. The expected outcome of such interventions is new product development by design improvement and value addition for existing products.

    7. Question 7. What Support Is Provided By The Ministry To Adopt Latest Quality Management Standards And Quality Technology Tools (qms/qtt)?

      Answer :

      Under the National Manufacturing Competitiveness Programme (NMCP) Scheme, one component is “Enabling MSME manufacturing sector to be competitive through Quality Management Standards/Quality Technology Tools (QMS/QTT)” was initiated in the XIth Five year plan. The main objective of the scheme is to sensitize and encourage SMEs to adopt latest Quality Management Standards/Quality Technology Tools (QMS/QTT) and to keep a watch on sectoral developments by undertaking the stated activities.

      The major activities under the Scheme are as:

      • Introduction of appropriate course modules for technical institutions
      • Organizing awareness campaigns for micro & small enterprises.
      • Organising competition–watch (c-watch).
      • Implementation of quality management standards and quality technology tools in selected micro & small enterprises.
      • Monitoring international study missions.

    8. Question 8. What Support Is Provided By The Ministry For Promotion Of Information & Communication Tools (ict) In Msme Sector?

      Answer :

      The Ministry implements the Information and Communication Technology (ICT) scheme to encourage and assist Indian SMEs to adopt ICT Tools and Applications in their production and business processes , and thereby improve their productivity and competitiveness in National and International Market.

    9. Question 9. What Support Is Provided By The Ministry For Setting Up Business Incubators?

      Answer :

      The Ministry implements the Support for Entrepreneurial and Managerial Development of SMEs Through Incubators”. The main purpose of the scheme is to nurture innovative business ideas (new/indigenous technology, processes, products, procedures, etc), which could be commercialized in a year. Under the Scheme, financial assistance between 75% to 85% of the project cost upto maximum of Rs. 8 lakh per idea/unit, provided to Business Incubators (BIs). The BIs are also eligible to avail Rs. 3.78 lakh for infrastructure and training expenses for incubating 10 ideas. Any individual or Micro and Small Industries (MSEs) that has innovative business idea at near commercialisation stage can approach the Business Incubators approved under the scheme. Under the scheme, various institutions like Engineering Colleges, Management Institutions, Research labs, etc. that have in-house incubation facilities and faculty for providing handholding support to new idea/entrepreneur can apply in the prescribed application form.

    10. Question 10. What Support Is Provided By The Ministry For Participation Of Msmes In International Events?

      Answer :

      Under the International Cooperation Scheme, financial assistance is provided on reimbursement basis to the State/Central Government organizations, industries/enterprises Associations and registered societies/trusts and organizations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet and for holding international conference and seminars which are in the interest of MSME sectors. Eligible beneficiary organizations can apply to the Ministry directly to avail the assistance under IC Scheme as per Scheme Guidelines.

    11. Question 11. Whether There Is Any Scheme For Assisting Msmes For Intellectual Property Rights?

      Answer :

      Under the National Manufacturing Competitiveness Programme (NMCP) to enhance the competitiveness of the SMEs sector, O/o DC (MSME) is implementing a scheme “Building Awareness on Intellectual Property Rights (IPR)” for the MSME. The objective of the scheme is to enhance awareness of MSME about Intellectual Property Rights (IPRs) to take measure for the protecting their ideas and business strategies.  Accordingly, to enable the MSME sector to face the present challenges of liberalisation,various activities on IPR are being implemented under this scheme.

    12. Question 12. What Support Is Provided By The Ministry For Participation Of Msmes In International Events?

      Answer :

      Under the International Cooperation Scheme, financial assistance is provided on reimbursement basis to the State/Central Government organizations, industries/enterprises Associations and registered societies/trusts and organizations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet and for holding international conference and seminars which are in the interest of MSME sectors. Eligible beneficiary organizations can apply to the Ministry directly to avail the assistance under IC Scheme as per Scheme Guidelines.

    13. Question 13. What Is Meant By Priority Sector Lending?

      Answer :

      Priority sector lending include only those sectors, as part of the priority sector that impact large sections of the population, the weaker sections and the sectors which are employment-intensive such as agriculture, and Micro and Small enterprises.

    14. Question 14. What Is Cluster Financing?

      Answer :

      Cluster based approach to lending is intended to provide a full-service approach to cater to the diverse needs of the MSE sector which may be achieved through extending banking services to recognized MSE clusters. A cluster based approach may be morebeneficial

      1. In dealing with well-defined and recognized groups
      2. Availability of appropriate information for risk assessment
      3. Monitoring by the lending institutions and
      4. reduction in costs.

      The banks have, therefore, been advised to treat it as a thrust area and increasingly adopt the same for SME financing. United Nations Industrial Development Organisation (UNIDO) has identified 388 clusters spread over 21 states in various parts of the country. The Ministry of Micro, Small and Medium Enterprises has also approved a list of clusters under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) and Micro and Small Enterprises Cluster Development Programme (MSE-CDP) located in 121 Minority Concentration Districts. Accordingly, banks have been advised to take appropriate measures to improve the credit flow to the identified clusters.

    15. Question 15. Is Credit Rating Mandatory For The Mse Borrowers?

      Answer :

      Credit rating is not mandatory but it is in the interest of the MSE borrowers to get their credit rating done as it would help in credit pricing that is cost of funds (interest and other charges etc.) of the loans taken by them from banks.

    16. Question 16. Why Is Credit Rating Of The Micro Small Borrowers Important?

      Answer :

      With a view to facilitating credit flow to the MSME sector and enhancing the comfortlevel of the lending institutions, the credit rating of MSME units done by reputed credit rating agencies and it should be encouraged. Banks are advised to consider these ratings as per availability and wherever appropriate structure their rates of interest depending on the ratings assigned to the borrowing SME units.

    17. Question 17. What Is Debt Restructuring Of Advances?

      Answer :

      A viable/potentially viable unit may apply for a debt restructuring if it shows early stage of stickiness. In such cases the banks may consider to reschedule the debt for repayment, consider additional funds etc. A debt restructuring mechanism for units in MSME sector has been formulated and advised to all commercial banks. The detailed guidelines have been issued to ensure restructuring of debt of all eligible small and medium enterprises. Prudential guidelines on restructuring of advances have also been issued which harmony the prudential norms over all categories of debt restructuring mechanisms (other than those restructured on account of natural calamities).

    18. Question 18. What Is The Definition Of A Sick Unit?

      Answer :

      As per the extant guidelines, a Micro or Small Enterprise (as defined in the MSMED Act 2006) may be said to have become Sick, if Any of the borrower account of the enterprise remains NPA for three months or more.

      OR There is erosion in the net worth due to accumulated losses to the extent of 50% of its net worth during the previous accounting year. This criterion enables banks to detect sickness at an early stage and facilitate corrective action for revival of the unit.

    19. Question 19. Apart From The Loans And Other Banking Facilities, Do The Banks Provide Any Guidance To Mse Entrepreneurs?

      Answer :

      Rural Self Employment Training Institutes (RSETIs):

      At the initiative of the Ministry of Rural Development (MoRD), Rural Self Employment

      Training Institutes (RSETIs) have been set up by various banks all over the country. These RSETIs are managed by banks with active co-operation from the Government of India and State Governments. RSETIs conduct various short duration (ranging preferably from 1 to 6 weeks) skill upgradation programmes to help the existing entrepreneurs compete in this ever-changing global market. RSETIs ensure that a list of candidates trained by them is sent to all bank branches of the area and co-ordinate with them for grant of financial assistance under any Govt. sponsored scheme or direct lending.

      Financial Literacy and consultancy support:

      Banks have been advised to either separately set up special cells at their branches, or vertically integrate this function in the Financial Literacy Centres (FLCs) set up by them, as per their comparative advantage. Through these FLCs, banks provide assistance to the MSE entrepreneurs in regard to financial literacy, operational skills, including accounting and finance, business planning etc.

    20. Question 20. How To Participate In International Exhibitions Through O/o Dc (msme)?

      Answer :

      O/O DC (MSME) participates in a limited number of international exhibitions every year. For this purpose, Office of DC (MSME) books space, and selected SSI units are given the facility of free display space and free shipment of their exhibits from Mumbai to the fair and back. To get selected for participation, the unit must be registered and be producing goods, which are export worthy. A team of SISI Officers of your State who will recommend participation of your unit assesses export worthiness. Preference is given to units, which are ISO-9000 certified. You may also attend the fair in your individual capacity after availing shipment from O/O DC (MSME) at your own cost or through financial assistance under the Market Development Assistance (MDA) scheme of the Ministry of Commerce. O/O DC(MSME) has also launched its own scheme called MSME-MDA to encourage MSME entrepreneurs to participate more actively in international exhibitions.

    21. Question 21. Can Benefits From Scheme For Marketing Assistance Be Availed From Both Central & State Government For Same Event?

      Answer :

      This may be decided by the screening committee who has been applied to for availing the benefits.

    22. Question 22. Is There Any Fee For Availing Benefits Of Marketing Assistance?

      Answer :

      For scheme under State Government, there is no fee. Whereas, for availing benefits through NSIC (Nodal agency) for Central Government, 10% of total expenditure of the Marketing assistance scheme shall be reimbursed to NSIC for implementing the scheme as administrative charges.

    23. Question 23. Who Can Avail The Benefits Of The Marketing Assistance Schemes?

      Answer :

      Any MSME registered unit.

    24. Question 24. Can The Units Apply Under These Schemes At Any Time Of The Year?

      Answer :

      Units can apply under these schemes at any time of the year. But they should apply minimum 3 months in advance of the participation in the event.

    25. Question 25. What Is The Mechanism For Disbursement Of Assistance To The Unit?

      Answer :

      The assistance is provided in form of reimbursement after submission of all the related expense details with supporting.

    26. Question 26. Whether The Scheme Is Applicable For New Msme Registered Units?

      Answer :

      Yes.

    27. Question 27. Are These Schemes Limited To Specific Sectors Only?

      Answer :

      No. These schemes can be availed by any unit in any sector subject to approval of their application by the screening committee.

    28. Question 28. For These Schemes Can Units Apply Individually Or They Have To Apply Through Any Trade Association / Organisation?

      Answer :

      Any unit can apply in either way individually or through a trade association /organisation.

    29. Question 29. Which Is The Nodal Agency For Marketing Assistance Scheme?

      Answer :

      Nodal Agency for schemes by Central Government is National Small Industries Corporations (NSIC) and for schemes by State Government is District Industries Center (DIC).

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