Launch a new credit guarantee scheme
- Government is planning to launch a new credit guarantee scheme for MSMEs.
- The government will launch a new credit guarantee scheme for MSMEs providing free loans up to Rs 100 crore without any guarantee.
- The proposal is expected to be presented before the Union Cabinet for approval.
- The main aim of the scheme will be to provide term loans for MSMEs to purchase machinery and equipment without collateral or third-party guarantees.
- The scheme will be implemented by pooling MSMEs’ credit risks, supported by a self-financing guarantee fund.
- The MSME sector is a crucial sector of the Indian Economy. It provides employment to 50 million people.
- MSMEs have boosted India’s GDP, their Gross Value Added (GVA) contribution has grown from 29.7% in 2017-18 to 30.1% in 2022-23.
