In her Union Budget 2024 speech, Finance Minister Nirmala Sitharaman unveiled new initiatives to support Micro, Small, and Medium Enterprises (MSMEs). A new credit guarantee scheme will be introduced to facilitate term loans for MSMEs. This scheme aims to reduce credit risks for these businesses. Under the scheme, a self-financing guarantee fund will offer coverage of up to Rs 100 crore per applicant, although the loan amount can be larger.
Finance Minister Nirmala Sitharaman says, “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. A self-financing guarantee fund will provide to each applicant cover of up to Rs 100 crore while loan amount may be larger…”
Additionally, a new scheme will be introduced specifically for MSMEs in the manufacturing sector. This scheme will provide term loans for the purchase of machinery and equipment without requiring collateral or additional guarantees. The guarantee fund for this scheme will also offer coverage of up to Rs 100 crore.
FM said, “to facilitate term loans for MSMEs for the purchase of machinery and equipment without collateral and guarantee, a new scheme will be introduced. This guarantee fund will provide guarantees of up to Rs 100 crore.”
