MSME Minister Introduces Rs 20 Lakh Scheme for GST-Exempted Units In a bid to bolster micro and nano enterprises (IMEs), the Ministry of Micro, Small, and Medium Enterprises has rolled out the ‘Special Provision for Informal Micro Enterprises under Credit Guarantee Scheme.’

This initiative is geared towards providing crucial credit support to IMEs, addressing the inherent credit risk perception associated with lending to this sector.

The scheme offers a significant boost to IMEs by providing up to 85% guarantee cover for unsecured loans of up to Rs 20 lakh This move is especially beneficial for IMEs registered on the Udyam portal, aiming to stimulate lending activities among member lending institutions (MLIs

By mitigating risks and increasing confidence, this scheme is expected to foster a conducive environment for IMEs to access much-needed credit facilities.

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), established in 2000, has been instrumental in supporting the growth of the MSE sector.

Notably, CGTMSE has surpassed Rs 1.50 lakh crore in guaranteed amount in the current fiscal year, showcasing a remarkable increase of 50% compared to the previous year.

This underscores the pivotal role played by CGTMSE in facilitating financial inclusion and credit flow to MSEs. The recent budget announcement by Finance Minister Nirmala Sitharaman highlights the government’s commitment to bolstering the MSE sector.

With a Rs 9,000 crore fund infusion into the CGTMSE corpus, the aim is to provide additional collateral-free credit amounting to Rs 2 lakh crore to MSMEs Furthermore, this infusion is projected to reduce the cost of credit by 1%, further enhancing the financial viability of MSEs