In a significant move aimed at fostering the growth of Micro, Small, and Medium Enterprises (MSMEs) in India, Finance Minister Nirmala Sitharaman in her Union Budget 2024 speech has announced the introduction of a new credit guarantee scheme. This initiative is designed to facilitate term loans to MSMEs by addressing the cooling of credit risks associated with these enterprises. The innovative scheme will operate through a self-financing guarantee fund, which will provide substantial cover to each applicant. Specifically, the fund will offer up to Rs 100 crore in coverage, ensuring that MSMEs have the necessary financial backing to secure larger loan amounts. This approach aims to reduce the financial barriers that often hinder the expansion and development of MSMEs, thereby promoting economic growth and employment opportunities.
"The introduction of this credit guarantee scheme marks a pivotal step in supporting the MSME sector, which plays a crucial role in the Indian economy," said Sitharaman. "By mitigating the risks associated with lending to MSMEs, we are enabling these businesses to access the funds they need to grow and thrive. "The announcement is seen as a a critical measure to enhance the financial stability and competitiveness of small and medium-sized enterprises. With the implementation of this scheme, the government aims to create a more inclusive and robust financial ecosystem that empowers MSMEs to contribute more significantly to the nation's economic progress.
Finance minister Nirmala Sitharaman is presenting the Union Budget 2024-25 in Parliament making it the first budget of Prime Minister Narendra Modi's third term. This is Nirmala Sitharaman’s seventh consecutive Budget as finance minister as she will surpass the record set by former Prime Minister Morarji Desai who presented five annual budgets and one interim budget as finance minister. Former Prime Minister Manmohan Singh presented five budgets in a row and Pranab Mukherjee also presented five consecutive budgets.