In her Union Budget 2024-25 speech, Finance Minister Nirmala Sitharaman unveiled several key measures aimed at bolstering the micro, small, and medium enterprises (MSME) sector, recognising its pivotal role in India’s economic landscape. The announcements are set to address critical challenges such as access to credit, regulatory burdens, and the need for skilling and employment generation.
The Government of India is set to come out with a credit guarantee scheme for MSMEs to facilitate term loans without collateral or third-party guarantee. A self-financing guarantee fund will cover up to Rs 100 crore for each applicant, while the loan amount can be larger.
FM Sitharaman said, "For facilitating term loans to MSMEs, a credit guarantee scheme will be introduced. The scheme will operate on the cooling of credit risks of such MSMEs."
This scheme will help mitigate credit risks for such enterprises. FM Sitharaman said that public sector banks to build in-house capability for credit assessment of MSMEs. As part of a slew of measures to boost the sector, the government will reduce the turnover threshold of MSME buyers for mandatory onboarding on TReDs platform from Rs 500 crore to Rs 250 crore. TReDS is an online platform to help MSMEs (Micro, Small and Medium Enterprises).
Financial support will be provided for 50 multi-product food irradiation units in the MSME sector, promoting food safety and export quality. Among other steps, SIDBI will open 24 new branches to serve MSMEs clusters.
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