Lok Sabha Question No. 1723 (UNSTARRED), answered on 2024-12-05
Subject: Collateral Free Loan to MSME Sector
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Raja A

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 1723 TO BE ANSWERED ON 05.12.2024

## COLLATERAL FREE LOAN TO MSME SECTOR

## 1723. SHRI RAJA A:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the  details  of  existing  schemes  to  help  revive  Micro,  Small  and  Medium  Enterprise  sector which is facing a crisis during the last four years;
- (b) whether the Government intends to provide collateral-free term loan to MSME sector for their working capital, if so, the details thereof;
- (c) whether any financial package covering financing, regulatory changes and technology support for  MSMEs  has  been  formulated  to  help  them  grow  and  also  compete  globally,  if  so,  the  details thereof; and
- (d) the  details  of  measures  taken  by  the  Government  to  facilitate  marketing  their  products,  in domestic market and global market including giving preference by various Government Departments in procurement thereof?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

- (a): The Ministry of Micro, Small and Medium Enterprises (MSME) implements various schemes and  programmes  for  the  development  of  MSME  Sector  across  the  country.  These  schemes/ programmes include Prime Minister's Employment Generation Programme, Credit Guarantee Scheme for  Micro  and  Small  Enterprises,  Micro  and  Small  Enterprises-Cluster  Development  Programme, Entrepreneurship  Skill  Development  Programme,  Procurement  and  Marketing  Support  Scheme, Raising  and  Accelerating  MSME  Performance,  International  Cooperation  Scheme,  National  SC/ST Hub, MSME Champions, etc.
- (b): The Government implements Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) to strengthen credit delivery system and to facilitate the flow of credit to the Micro and Small Enterprise sector without the hassles of collateral and third party guarantee up to a maximum of Rs. 500 lakh. Term loan and/or working capital facilities are eligible under the CGS for MSEs.
- (c): Union  Budget  2024-25  announced  a  package  covering  financing,  regulatory  changes  and technology support for MSMEs to help them grow and also compete globally, as given below:
-  Support for promotion of MSMEs;
-  Credit Guarantee Scheme for MSMEs in the Manufacturing Sector;
-  New assessment model for MSME credit;
-  Credit Support to MSMEs during Stress Period;

-  Mudra Loans limit enhancement from Rs. 10 lakh to 20 lakh;
-  Enhanced scope for mandatory onboarding in TReDS;
-  SIDBI branches in MSME clusters;
-  MSME Units for Food Irradiation, Quality & Safety Testing;
-  E-Commerce Export Hubs.

(d): The Government has taken various measures to facilitate marketing and procurement support to MSME. Some of the measures are as under:

-  The Ministry of Micro, Small and Medium Enterprises implements the Public Procurement Policy  for  Micro  and  Small  Enterprises  Order,  2012  under  the  MSMED  Act,  2006.  The Policy  mandates  25%  annual  procurement  from  Micro  and  Small  Enterprises  by  Central Ministries/ Departments/ Central Public Sector Enterprises, including 4% from Micro and Small Enterprises owned by SC/ST entrepreneurs and 3% from Micro and Small Enterprises owned by women entrepreneurs.
-  The  Ministry  of  MSME  implements  Procurement  and  Marketing  Support  Scheme  for enhancing market access of Micro and Small Enterprises. The Scheme  facilitates participation in National/International Trade Fairs/Exhibitions/MSME Expo, etc.
-  The  Ministry  of  Micro,  Small  and  Medium  Enterprises  implements  International  Cooperation Scheme to encourage MSMEs to export their products and facilitates participation of  MSMEs in international  exhibitions/fairs/buyer-seller  meets  held  abroad  and  organizes international conferences/seminars/workshops in India.
-  For Capacity Building of First Time Exporters (CBFTE), reimbursement is provided to new Micro and Small Enterprises which are exporters for costs incurred on  Registration cumMembership  Certification  (RCMC)  with  Export  Promotion  Councils,  Export  Insurance Premium and Testing & Quality Certification for exports.

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