In the Union Budget 2024-25, Finance Minister Nirmala Sitharaman has announced a credit guarantee scheme for the MSMEs in the manufacturing sector. The package will allow financial and technical support along with regulatory changes for the micro, small, and medium enterprises to grow on a global scale.
A credit guarantee scheme will facilitate term loans without third-party collateral to MSMEs for the purchase of machinery and equipment.
Sitharaman mentioned in the budget presentation, “The scheme will operate on pooling of credit risks of such MSMEs, a separately constituted self-financing guarantee fund will provide to each applicant guarantee cover up to INR 100 Cr, while the loan amount may be larger.”
“The borrower will have to provide an upfront guarantee fee and annual guarantee fee on the reducing loan balance,” she added.
50 multi-product food irradiation units of the MSMEs will be given financial support.
Talking about the public sector banks, the FM stated, “They will also take the lead in developing or getting developed a new credit assessment model based on scoring of digital footprint of MSMEs in the economy. This is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria.”
For the mandatory onboarding on TReDS platform, the turnover threshold will be brought down from Rs 500 crore to Rs 250 crore.
