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MSME SAMADHAAN: Delayed Payment Monitoring System

Shruti Goel
September 29, 2022


In India, the Ministry of Micro, Small, and Medium Enterprises (MSME) sector acts as a backbone of the Indian economy and promotes equitable development for all. Employing around 120 million people and contributing approximately 30% to India’s GDP, Micro, Small and Medium Enterprises (MSMEs) play a pivotal role in job creation and nation-building.

Acknowledging the tremendous potential of MSMEs to help India achieve the $5 trillion economy mark by 2025, the Hon. Union Minister for MSMEs, Shri Nitin Gadkari, recently unveiled his vision to increase MSMEs’ contribution to India’s GDP to over 50% from the current 29.7% in the next five years. While the MSME sector definitely has the potential to contribute in excess of 50% to India’s GDP, MSMEs are strife with a plethora of challenges like access to credit, skilled manpower, market access, etc. that hinder their sustained growth. One such major challenge faced by many MSMEs is uncertain cash flows arising out of delayed payments from the buyers of their goods or services.

Realising the widely prevalent issue of MSME recovery of dues that often leads to a domino effect of subsequent delays in payments to employees and vendors of such MSMEs, the Micro, Small and Medium Enterprise Development (MSMED) Act prescribes stringent provisions to deal with cases of delayed payments to MSMEs. The Act mandates that the buyer is liable to pay compound interest with monthly rests to the supplier (MSME) on the unpaid amount at three times of the bank rate notified by RBI in case the buyer does not make payment to an MSME for the supplies of goods or services within 45 days of the day of acceptance/deemed acceptance of the said goods or services.

To ensure speedy disposal of cases related to delayed payments of MSMEs, the government launched a dedicated Delayed Payment Monitoring Portal – MSME Samadhaan in October 2017 that quickly allows any MSME having a valid Udyog Aadhaar (UAM) to file an online complaint of delayed payment against the buyer of their goods or services. The MSME Samadhaan portal enables the MSMEs to directly register their cases about delayed payments against the buyer of goods/services before the Micro and Small Enterprise Facilitation Council (MSEFC). These complaints are visible to the Central Ministries/Departments/CPSEs/State Governments, etc for pro-active actions.

MSME Recovery

Features of the MSME Samadhaan Portal

  1. Filing the application online: Entrepreneurs/MSME can now file claims online for delayed payments using the MSME Samadhaan portal. To do so, a user must have a Udyog Aadhaar number validated with Aadhaar or Udyam Registration number.
  2. Check status: Entrepreneurs/MSME can by means of the portal check the status of the filed online applications for delayed payments.
  3. Pending payments dashboard: The portal will give information about the pending amount of MSMEs with individual buyers, CPSEs, Central Ministries, State Governments, etc. The CEO of PSEs and the Secretary of the concerned Ministries will be able to monitor the cases of delayed payment and issue necessary instructions to resolve such issues.

MSME Samadhaan Portal

Limitations with SAMADHAAN Scheme and How Insolvency and Bankruptcy Code (IBC) Solves Them

Despite best efforts by the government, there remains a large number of cases with unpaid dues under the Samadhaan scheme. This is because provisions under the scheme are relatively ‘soft’ as compared to some of the more powerful tools such as ‘Insolvency and Bankruptcy Code’ (IBC 2016), under which an operational creditor can enforce the recoveries by filing for an insolvency application under the Buyer. In the event the buyer is unable to pay the dues within the prescribed period, the assets of the corporate debtor may potentially be diluted to settle the operational and financial debt.

About Ancoraa

Ancoraa Resolution is a financial services firm focussed on debt resolution and financial restructuring. Ancoraa Resolution helps suppliers file the insolvency applications and get their dues faster by leveraging its technology platform and speeding up the recovery process. With over 35 licensed Insolvency Professionals located across 14 cities in India, Ancoraa Resolution ensures that you are equipped to take speedy action in matters of insolvency, debt resolution and liquidation.

Ancoraa’s flagship technology, the Rezolution Engine® – is India’s first and only ‘Resolution-as-a-Service’ platform providing a collaborative digital avenue to run the entire resolution process in compliance with the Insolvency & Bankruptcy Code of India. Whether you are a supplier, a homebuyer, a bank or a personal guarantor, Rezolution Engine® enables anyone to initiate an insolvency application and allows all the participants to get a single point of view to the insolvency and bankruptcy proceedings, while maintaining compliance and governance throughout the process.

If you are also an MSME and are facing a delayed payment problem and do not know how, where and to whom to file a complaint application, then Ancoraa is your go-to solution! By transforming the entire process of MSME recovery of dues much faster and more seamless, the experts at Ancoraa promise you nothing but the rightful payment you deserve.

About the author
Shruti Goel

Shruti is the operations specialist at Ancoraa. She is responsible for IP engagement, company research and operational excellence initiatives. She is passionate about and writes on topics of Insolvency Technology and administers Ancoraa’s flagship technology platform ‘Rezolution Engine’.

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