Government Enhances Financial Access for MSMEs, Announces MoS Karandlaje

The Government of India is actively working to enhance financial access for Micro, Small, and Medium Enterprises (MSMEs), Minister of State for MSMEs Sushri Shobha Karandlaje stated in a written reply to the Lok Sabha. Stakeholder consultations remain a continuous part of policymaking in the sector, ensuring that initiatives align with the needs of MSMEs across the country.

According to the Minister, the government has implemented a range of measures and support programs aimed at improving financing options for MSMEs, reinforcing its commitment to fostering growth and stability in one of India’s most critical economic segments.

Some of them that Karandlaje outlined includes:

1. The Ministry of Micro, Small and Medium Enterprises and Small Industries Development Bank of India (SIDBI) jointly set up Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) in the year 2000, to provide credit guarantees for the loans extended by Member Lending Institutions (MLIs) to Micro and Small Enterprises (MSEs), without requiring collateral security or third-party guarantee under Credit Guarantee Scheme (CGS). Recently the Guarantee ceiling has been increased from Rs. 5 Crore to Rs. 10 Crore.
2. Prime Minister’s Employment Generation Programme provides Margin Money subsidy upto 35%, for setting up of new micro enterprises, in the non-farm sector with project cost of Rs. 50 Lakh and Rs. 20 Lakh, for Manufacturing and Services enterprises, respectively.
3. PM Vishwakarma was launched on 17.09.2023 to provide end-to-end holistic support to artisans and craftspeople of 18 traditional trades who work with their hands and tools. The Scheme includes provision of loans upto Rs. 3 Lakh with interest subvention of max upto 8%.
4. Self Reliant India (SRI) Fund has been set up to infuse Rs. 50,000 Crores as equity funding in MSMEs, with Rs. 10,000 Crore from the Government of India and Rs. 40,000 Crore through Private Equity/Venture Capital Funds.

In addition, the Government has also taken various other measures to enhance access to credit for MSMEs including collateral free credit to MSEs, implementation of Trade Receivables Discounting System (TReDS), Mutual Credit Guarantee Scheme for projects requiring loans upto Rs 100 Crore to procure machinery and equipment, reduction in timelines for credit decisions by banks etc.