Government Unveils Credit Guarantee Scheme for MSMEs in Union Budget

Finance Minister Nirmala Sitharaman announced a new credit guarantee scheme for MSMEs that will provide term loans without collateral. The Union Budget also includes measures like reduced turnover thresholds for TReDs onboarding and 24 new SIDBI branches for MSME clusters. Rs 2.66 lakh crore is allocated for rural development.

Finance Minister Nirmala Sitharaman unveiled a credit guarantee scheme aimed at facilitating term loans for MSMEs without the need for collateral or third-party guarantees during her seventh Union Budget presentation on Tuesday.

Public sector banks will be tasked with building in-house credit assessment capabilities for MSMEs, while the turnover threshold for mandatory onboarding on the TReDs platform will be reduced from Rs 500 crore to Rs 250 crore. TReDs is an online platform designed to assist Micro, Small, and Medium Enterprises (MSMEs).

As part of the government's comprehensive measures to bolster the sector, SIDBI will open 24 new branches dedicated to MSME clusters. Additionally, Rs 2.66 lakh crore has been allocated for rural development, and the government will initiate a saturation drive under the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan (PM JANMAN).

(With inputs from agencies.)