Government Rolls Out ₹7,300 crore Schemes to Ease MSME Financing

Context:

To improve access to affordable credit for export-oriented MSMEs, the government has rolled out new credit-linked support schemes, aimed at strengthening liquidity, boosting exports, and enhancing bank lending.

Key Announcement

• The Government of India has launched two schemes worth ₹7,300 crore to ease financing constraints for Micro, Small and Medium Enterprises (MSMEs).
• The schemes are part of a broader effort to support export growth and MSME competitiveness.

Scheme 1: Collateral Support for Export Credit

• Total outlay: ₹2,114 crore
• Objective:
  • Provide credit-guarantee support for export-linked working capital loans to MSME exporters
• Key Features:
  • Collateral guarantee up to ₹10 crore per firm
  • Guarantee coverage:
    • Micro & Small exporters: up to 85%
    • Medium exporters: up to 65%
• Nature:
  • Designed to complement existing credit guarantee mechanisms
  • Aims to increase bank lending to export-oriented MSMEs
• Rollout:
  • Detailed guidelines to be notified by CGTMSE
  • Initial pilot phase, followed by integration into a revised export promotion framework

Scheme 2: Credit Support under Export Promotion Framework

• Part of the broader Export Promotion Mission measures
• Detailed operational guidelines to be issued by the RBI
• Focus:
  • Lowering the cost of credit
  • Improving liquidity access for MSMEs engaged in exports