The Government of India has expanded a series of financial support measures aimed at improving access to credit for Micro, Small and Medium Enterprises (MSMEs), Minister of State for MSMEs Shobha Karandlaje informed the Lok Sabha on Friday.
According to the MSME Ministry, multiple schemes have been strengthened to enhance the flow of credit and provide easier financing options for small businesses, artisans, and traditional craftsmen across the country.
One of the major steps includes increasing the guarantee ceiling under the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) from ₹5 crore to ₹10 crore. The CGTMSE, set up jointly by the MSME Ministry and SIDBI in 2000, enables micro and small businesses to secure collateral-free loans through participating lending institutions.
Under the Prime Minister’s Employment Generation Programme (PMEGP), new micro-enterprises in the non-farm sector are eligible for a margin money subsidy of up to 35%. The subsidy is available for projects costing up to ₹50 lakh in manufacturing and ₹20 lakh in services.
The government also highlighted progress under PM Vishwakarma, launched in September 2023, to support artisans and craftspeople from 18 traditional trades. The scheme provides loans of up to ₹3 lakh with an interest subvention of up to 8%, along with a wider package of training and toolkit support.
In addition, the Self Reliant India (SRI) Fund has been established to infuse ₹50,000 crore into MSMEs through equity funding. Of this, ₹10,000 crore comes from the central government, with the remaining ₹40,000 crore mobilised from private equity and venture capital funds.
Beyond these flagship initiatives, the government has undertaken several measures to further ease credit access, including collateral-free loans for micro and small enterprises, wider adoption of the Trade Receivables Discounting System (TReDS), introduction of a Mutual Credit Guarantee Scheme for loans up to ₹100 crore for machinery procurement, and a reduction in loan-processing timelines across banks.
