financial Services Secretary M. Nagaraju on Thursday said the government will soon launch a new loan guarantee scheme for the Micro, Small and Medium Enterprises (MSME) sector, under which loans up to Rs 100 crore will be given. “We are going to bring a scheme, which was announced by the Finance Minister in his last budget,” he said at the concluding ceremony of ‘Gramin Bharat Mahotsav’. Under this, loans up to Rs 100 crore can be provided without guarantee, if they are already running an enterprise. This scheme will soon be placed before the Union Cabinet for approval.
The announcement was made in the budget
Announcing the Budget 2024-25, Finance Minister Nirmala Sitharaman had said, “A credit guarantee scheme has been launched to provide ‘term loan’ facility to MSMEs for purchasing machinery and equipment without any guarantee or third party guarantee. Will be done. A separately constituted Self-Financing Guarantee Fund will provide a ‘cover’ of guarantee up to Rs 100 crore to each applicant, while the loan amount may exceed this.” He had said the borrower would have to pay upfront guarantee charges and declining loan balance. Annual guarantee fee will have to be paid.
MSME sector provides employment to 5 crore people
Financial Services Secretary M. Nagaraju said that the Micro, Small and Medium Enterprises (MSME) sector provides employment to five crore people. MSME exports have witnessed significant growth, from Rs 3.95 lakh crore in 2020-21 to Rs 12.39 lakh crore in 2024-25. This underlines their important role in boosting India’s economy and strengthening global trade. The gross value added (GVA) of MSMEs to India’s gross domestic product (GDP) was 29.7 percent in 2017-18, increasing to 30.1 percent in 2022-23. Nagaraju said that the government is keen to provide more credit to rural areas through its various schemes to promote entrepreneurship in rural India. He said that as the country moves forward, there is a need to focus on four things – quality, connectivity for exports, capacity building and support to achieve the vision of Advanced India.
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