MSME delayed payment: the interest a late client owes you
Chasing a client feels awkward, so it's easy to wait. The law is on your side: this shows the interest a late buyer owes a registered micro or small business.
Your numbers
Common answers are filled in. Change the ones you know.
Typical: ₹1,00,000. Put in yours.
5.75% after October 2026. Change it if the RBI has moved it.
It only changes the order on your statement.
What waiting costs you
₹2,133 interest
About ₹2,133 of interest is owed to you on top
If you're a registered micro or small enterprise, a buyer must pay by the date you agreed, and within 45 days at most. After that they owe compound interest at three times the RBI bank rate: 17.3% a year. Every day of waiting adds about ₹47.
Your small stepSend one polite reminder today, with the invoice and the date they accepted the work.
How we worked this out
- Days past 45: 90 minus 45 = 45 days.
- Rate: 3 × 5.8% = 17.3% a year, added monthly.
- Interest: ₹1 lakh × ((1 + 17.3% ÷ 12) to the power of 1.5 months, minus 1) = ₹2,133.
- It applies to micro and small enterprises registered on Udyam. We don't give legal advice.
- How much it matters to you: 7 out of 10. It only changes the order on your statement.
Sources
- MSMED Act, via SCC Online (2022): A buyer must pay a registered micro or small enterprise by the agreed date, and within 45 days of accepting the goods or services at most. If they pay late, they owe compound interest, added monthly, at three times the RBI bank rate.
- Reserve Bank of India (2026): The RBI bank rate is 5.75% after the October 2026 policy decision.
How it works
Under the MSMED Act, a buyer must pay a registered micro or small enterprise by the agreed date, and within 45 days of accepting the goods or services at most.
After that, they owe compound interest, added monthly, at three times the RBI bank rate. The bank rate is 5.75% after October 2026, so that's 17.25% a year.
It covers micro and small enterprises registered on Udyam. A state council can help you recover the money.
Sources
- MSMED Act, via SCC Online (2022): It covers micro and small enterprises registered on Udyam. A 2026 amendment may change the process once notified.
- Reserve Bank of India (2026): It changes with RBI policy. Put in the current rate if it has moved.
Rules last checked: October 2026. They can change at any time, so check the official page before you plan anything.
Questions people ask
Is this legal advice?
No. It shows the rule and the interest on your own numbers. For your case, a lawyer or your state's MSE Facilitation Council can help.
What if we agreed on a longer time?
The law caps any agreed time at 45 days. Check your contract and the act's own wording for your case.
Putting off more than one thing?
Pick up to five and get your Delay Statement: what to do first, what can wait, and one small step for today.
Want a nudge to act on it?
The app turns what you're putting off into a short list for each day: your Top 3 and one small step at a time. It's free.
We show what waiting costs on your own plans. We never tell you what to buy or invest in. Rules and averages change, so check the official pages before you plan anything.