India 
Canada
In the vast and vibrant landscape of Indian entrepreneurship, Micro, Small, and Medium Enterprises (MSMEs) form the backbone of our economy. They drive innovation, generate employment, and nurture the dreams of millions. Yet, despite their undeniable contribution, MSMEs continue to face one of the most fundamental and frustrating challenges—delayed payments.
Delayed payments are more than an inconvenience. For many small businesses, they can spell disaster. Disrupted cash flows, rising debts, and operational constraints often push otherwise promising enterprises into stagnation or even closure. The emotional toll is just as heavy, as hardworking entrepreneurs are forced to chase payments instead of progress.
Recognizing this issue, the Government of India enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. This legislation provides a clear and enforceable framework for MSMEs to recover their dues in a timely manner. Under the Act, if a buyer fails to make payment to an MSME within 45 days of delivery of goods or services, they are liable to pay interest on the outstanding amount. This interest is not nominal—it is compounded monthly and charged at three times the bank rate notified by the Reserve Bank of India.
What makes the MSMED Act particularly effective is the establishment of the Micro and Small Enterprises Facilitation Council (MSEFC) in every state. These councils serve as the forum for dispute resolution. MSMEs can file their complaints online through the MSME Samadhaan Portal, making the process accessible and transparent. Initially, the Council attempts conciliation. If that fails, it proceeds with arbitration, and the decision made is binding, enforceable, and carries the same weight as a civil court decree.
Moreover, the law protects MSMEs from long, drawn-out legal battles. If a buyer wishes to appeal an award, they must first deposit 75% of the awarded amount with the court. This provision ensures that the intent to delay justice is curbed, and MSMEs are not left waiting indefinitely for what is rightfully theirs.
The MSMED Act is not just a piece of legislation—it is a symbol of empowerment. It assures MSME owners that they are not alone, that their work is valued, and that the law is on their side.
As members of the business community, we must raise awareness about this powerful tool. Whether you are an MSME navigating delayed payments, a stakeholder working with small enterprises, or simply a citizen who believes in fairness—it’s time we stand together and ensure that no small business is left unheard.
