Lok Sabha Question No. 180 (STARRED), answered on 2025-07-31
Subject: Credit Support to MSMEs
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Raja A

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

## LOK SABHA STARRED QUESTION NO. *180 TO BE ANSWERED ON: 31.07.2025

## CREDIT SUPPORT TO MSMEs

## *180. SHRI RAJA A. :

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

- (a) whether the Government has announced any policy in order to increase the access to credit by the MSMEs;
- (b) if so, the details thereof;
- (c) the number of trade credit cards issued with credit limits upto Rs. 5 lakhs during the last three months after the announcement in the Budget;
- (d) whether any other steps are being taken by the Government to ensure adequate credit support for MSMEs in the country;
- (e) if so, the details thereof;
- (f) whether  any  subsidy  scheme  has  been  launched  to  provide  institutional  finance  to  SC/ST MSME unit holders for procurement of plant and machinery; and
- (g) if so, the details thereof?

## ANSWER

## MINISTER FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI JITAN RAM MANJHI)

- (a) to (g): A statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO. 180* FOR 31.07.2025 REGARDING "CREDIT SUPPORT TO MSMEs".

(a) to (e): To  enhance  the  access  to  credit  for  MSMEs,  Government  announced  the  following policy measures in Budget 2025:

- i. Credit  guarantee  cover  has  been  increased  for  Micro  and  Small  Enterprises  (MSEs),  under Credit Guarantee Scheme of the Ministry of MSME, from Rs. 5 Crore to Rs. 10 Crore, which has been given effect from 01.04.2025. A total of 5.53 lakh number of guarantees amounting to Rs. 91,273 crore has been extended to MSEs during the first quarter of FY 2025-26 under the Scheme.
- ii. Government announced provisioning of customized Credit Cards with a limit of Rs. 5 Lakh, for micro enterprises registered on Udyam Portal. As informed by Department of Financial Services, implementation of the Budget Announcement has been taken on hand.

The following measures have also been taken to enhance access to credit for MSMEs:

- i. Priority  Sector  Lending  Guidelines :  In  terms  of  Master  Direction  on  'Priority  Sector Lending (PSL)- Targets and Classification' dated March 24, 2025, all bank loans to MSMEs conforming to the conditions prescribed therein qualify for classification under priority sector lending.
- ii. Collateral  requirements  of  MSME  units :  Scheduled  Commercial  Banks  have  been mandated not to demand collateral security in the case of loans up to ₹10 lakh extended to units in the MSE sector.
- iii. Working Capital Computation : Computation of working capital requirements of MSE units to  be  done  by  banks  on  the  basis  of  simplified  method  of  minimum  20%  of  the  projected annual turnover of the unit for borrowal limits up to ₹5 crore.
- iv. Timeline for credit decisions: For loans up to ₹25 lakh to units in the MSE borrowers, banks are advised that the timelines for credit decisions shall not be more than 14 working days.
- v. Trade  Receivables  Discounting  System  (TReDS): Reserve  Bank  of  India  (RBI)  issued guidelines  for  setting  up  and  operating  the  TReDS.  The  scheme  facilitates  the  financing  of trade  receivables  of  MSMEs  from  corporate  and  other  buyers,  including  government departments and public sector undertakings (PSUs) through multiple financiers electronically. Five entities licensed by RBI are presently operating TReDS.

- vi. Mutual  Credit  Guarantee  Scheme (MCGS-MSME) was launched by  the  Government  to help Micro, Small and Medium Enterprises (MSMEs) access loans to grow their businesses, especially for projects involving purchasing of essential equipments and machinery for loans up to Rs.100 crores.

(f) and (g): Under  Special  Credit  Linked  Subsidy  Scheme  component  of  National  Scheduled Caste  and  Scheduled  Tribe  Hub  (NSSH),  25%  subsidy  (up  to  Rs.  25  lakh)  is  provided  to  SC-ST owned  MSEs  for  purchase  of  new  plant  and  machinery  and  equipment  through  term  loan  for  all manufacturing sectors and service sectors. Since the inception of the Scheme in October 2016, until 28.07.2025, financial assistance of Rs.321.88 crore has been provided to 2,841 SC/ST beneficiaries.

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