Government Expands Financial Support Framework to Boost MSME Access to Credit
In a written reply in the Lok Sabha, Minister of State for Micro, Small and Medium Enterprises Shobha Karandlaje outlined a series of initiatives designed to ease credit flow, support traditional artisans, and mobilise large-scale equity investments.
New Delhi, December 5: The government has strengthened the financial ecosystem for micro, small and medium enterprises by expanding key credit schemes and introducing new measures aimed at improving access to capital for MSMEs across sectors. In a written reply in the Lok Sabha on Friday, Minister of State for Micro, Small and Medium Enterprises Shobha Karandlaje outlined a series of initiatives designed to ease credit flow, support traditional artisans, and mobilise large-scale equity investments.
The Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE), operated jointly by the MSME ministry and SIDBI, has increased its guarantee ceiling from ₹5 crore to ₹10 crore. The enhancement is expected to give banks greater comfort in extending collateral-free loans to small businesses under the Credit Guarantee Scheme.
The Prime Minister’s Employment Generation Programme continues to support new micro-enterprises in the non-farm sector with margin money subsidies of up to 35 percent. The scheme allows project costs of ₹50 lakh for manufacturing and ₹20 lakh for services, enabling first-generation entrepreneurs to access formal credit with reduced upfront burden.
The government also highlighted the progress of PM Vishwakarma, launched in September 2023, which provides end-to-end support for artisans and craftspeople in 18 traditional trades. Beneficiaries are eligible for loans of up to ₹3 lakh with an interest subvention of up to 8 percent, along with skilling, toolkit support and market linkage initiatives.
To catalyse large-scale equity infusion into the MSME sector, the Self Reliant India (SRI) Fund—structured as a mother fund—aims to mobilise ₹50,000 crore. Of this, ₹10,000 crore is being contributed by the government, with the remaining ₹40,000 crore expected from private equity and venture capital partners. The objective is to strengthen balance sheets, support expansion and help MSMEs scale globally.
The government has also taken additional steps to widen credit access, including collateral-free lending for micro-enterprises, operationalisation of the Trade Receivables Discounting System (TReDS), reduction in timelines for bank credit decisions, and the Mutual Credit Guarantee Scheme for machinery and equipment loans of up to ₹100 crore.
The minister stated that stakeholder consultations remain a continuous part of policymaking, and the interventions announced so far reflect evolving requirements of the MSME sector. The measures are expected to bolster credit flow, support entrepreneurship, and enhance overall competitiveness of India’s MSME ecosystem, she added.
