NEW DELHI: In their efforts to revitalise the ailing MSME sector, the backbone of the Indian economy and creator of crores of jobs, the NDA government has come up with a slew of reforms. Finance Minister Nirmala Sitharaman on Tuesday informed that the government is increasing the limit for MUDRA loans for Micro, Small and Medium Enterprises (MSMEs) from Rs 10 lakh to Rs 20 lakh for those who have availed the loans before and successfully repaid.
Pradhan Mantri MUDRA Yojana was launched on April 8, 2015, to facilitate easy collateral-free credit of up to Rs 10 lakh to non-corporate, non-farm small and micro-entrepreneurs. The government had earlier this year extended 43 crore loans aggregating to Rs 22.5 lakh crore under the scheme.
The FM also announced a credit guarantee scheme for MSMEs in the manufacturing sector under which enterprises can take loans without having to give any collateral or third-party guarantee. She also said that term loans will be facilitated for purchase of machinery.
To make credit more accessible to MSMEs via a new, independent, and in-house mechanism, Sitharaman proposed that public sector banks will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment. “This is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria,” she said.
The Centre is also coming up with a new arrangement to facilitate the continuation of bank credit to borrowers during their period of stress. The FM also announced that the turnover threshold of buyers for mandatory onboarding on TReDS platform will be cut from Rs 500 crore to Rs 250 crore. The online platform is meant to help MSMEs.