Budget 2024: MSMEs get credit support, ₹20L limit MUDRA loans
What's the story
Finance Minister Nirmala Sitharaman announced a new credit guarantee scheme for Micro, Small, and Medium Enterprises (MSMEs) during the full budget presentation for 2024-25. "A credit guarantee scheme will be introduced for facilitating term loans to MSMEs," Sitharaman stated. She further added that the fund would provide each applicant with coverage of up to ₹100 crore, even if the loan amount is larger.
Benefit
Scheme aims to boost MSMEs's access to financing
The new credit guarantee scheme is designed to strengthen MSMEs by reducing their credit risks and improving their access to financing. This initiative responds directly to the MSME sector's request for a special package that would enhance their access to institutional credit at competitive rates. The goal is also to establish a more balanced relationship between banks and MSMEs, according to Sitharaman.
MUDRA loans
Limit of MUDRA loans doubled
Sitharaman has also doubled the limit of MUDRA loans as part of the Budget 2024. Those who have availed and repaid loans under the TARUN category can now avail MUDRA loans of up to ₹20 lakh, up from the current limit of ₹10 lakh. Job creation in the manufacturing sector will also be incentivized through a scheme linked to the employment of first-time employees.