Udyam Registration is a government registration in India provided by the Ministry of Micro, Small, and Medium Enterprises (MSME). It comes with a unique identification number known as the Udyam Registration Number (URN) and a certificate called the Udyam Registration Certificate. Running a micro, small, or medium business in India comes with many challenges, funding being one of the biggest. From buying machinery to paying staff or expanding operations, every stage needs financial support.

To help businesses grow, the Indian government has launched many loan schemes specifically for MSMEs. But there’s one condition that many business owners don’t know:
You must be Udyam-certified to access most of these schemes.

In this article, we’ll explain:

  • What Udyam Registration is

  • Why it’s essential for getting MSME loans

  • List of MSME loan schemes only available to Udyam-registered businesses

  • How to apply and take full advantage

What is Udyam Registration?

Udyam Registration is the official way for Indian businesses to register as MSMEs (Micro, Small, and Medium Enterprises). It’s issued by the Ministry of MSME through the Udyam Registration Portal.

This registration gives your business a unique identification number and a government-recognized certificate.

It is completely easy, 100% online, and requires only your Aadhaar and PAN.

Once registered, your business becomes eligible for:

  • Government tenders

  • Subsidies and incentives

  • Special loan schemes

  • Market support

  • Legal protection

Without Udyam Registration, you are not officially recognized as an MSME — and cannot apply for most MSME loans.

Why Udyam Registration is Required for MSME Loans

Banks and financial institutions need proof that your business qualifies as an MSME. That proof is your Udyam certificate.

Here's why Udyam Registration is a must-have for MSME loans:

  1. It proves your business size and type: Only businesses within the MSME investment and turnover limits are eligible to apply for MSME loans.

  2. It helps banks process your loan faster: With Udyam data linked to PAN, GST, and Aadhaar, your profile is more transparent and trustworthy.

  3. It opens doors to government-backed schemes: Schemes like MUDRA, CGTMSE, and PMEGP are only available to registered MSMEs.

  4. It shows you are legally compliant: Banks prefer giving loans to businesses that follow rules and are registered with the government.

MSME Loan Schemes Only for Udyam-Certified Businesses

Here are the top government and bank-supported loan schemes where Udyam Registration is mandatory:

1. MUDRA Loans (Pradhan Mantri Mudra Yojana)

For: Micro and small enterprises
Loan Amount: Up to ₹10 lakh
Types:

  • Shishu (up to ₹50,000)

  • Kishor (₹50,001–₹5 lakh)

  • Tarun (₹5 lakh–₹10 lakh)

Why Udyam is required: Lenders check your Udyam status before processing your MUDRA loan, especially for non-individuals like small shops, vendors, or service providers.

2. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

For: First-time borrowers with no collateral
Loan Amount: Up to ₹5 crore
Guarantee Coverage: Up to 75–85% of the loan

Why Udyam is required: Only Udyam-registered MSMEs are covered under this credit guarantee. Without Udyam, your loan won’t be backed by CGTMSE.

3. Prime Minister’s Employment Generation Programme (PMEGP)

For: New businesses and startups in manufacturing and services
Loan Amount: Up to ₹25 lakh
Subsidy: 15–35% depending on location and category

Why Udyam is required: You must register on the Udyam Registration Portal to apply through KVIC or the District Industries Centre.

4. Stand-Up India Scheme

For: SC/ST and women entrepreneurs
Loan Amount: ₹10 lakh to ₹1 crore
Purpose: Setting up new manufacturing, service, or trading units

Why Udyam is required: Registration helps prove MSME status and business category, which is essential to avail of the scheme.

5. SIDBI Make in India Soft Loan Fund for MSMEs (SMILE)

For: MSMEs in manufacturing sectors
Loan Amount: Varies
Interest Rate: 8.5% onwards

Why Udyam is required: SIDBI verifies the Udyam certificate to confirm that the applicant is a registered MSME.

6. Emergency Credit Line Guarantee Scheme (ECLGS)

For: Businesses impacted by COVID-19
Loan Amount: Up to ₹5 crore
Tenure: 4 years with a 1-year moratorium

Why Udyam is required: The schemeis  applied to GST-registered MSMEs. Udyam registration strengthened eligibility.

7. TReDS (Trade Receivables Discounting System)

For: MSMEs supplying to big companies

Purpose: Get early payments by selling unpaid invoices

Why Udyam is required:Only Udyam-registered businesses can onboard the platform and participate in receivable discounting.

How to Apply for Udyam Registration

Follow these simple steps to register your business on the Udyam Registration Portal:

Step-by-step process:

1. Visit the Website: Go to the Udyam Registration portal.

2. Fill Out the Form: Enter your basic details in the online form.

3. Submit the Form: Review your details and submit the form.

4. Payment: Pay the required fee for the registration.

5. Receive OTP: You will receive an OTP on your phone and email to verify.

6. Enter OTP: We’ll call to confirm your OTP and any details to complete the form.

7. Get Your Certificate: Your Udyam registration certificate will be sent to your email.

Note: You can also Print Udyam Certificate from our website

Conclusion

Many small business owners are puzzled when their loan applications get rejected, and a common reason is the lack of Udyam Registration. If you want to grow your business, access loans at better interest rates, get government support, participate in tenders, and build credibility, Udyam Registration is the first and most crucial step. Don’t wait for rejection to realize its importance. Register now on the Udyam portal and make your business fully prepared and eligible for MSME loan opportunities.