Lok Sabha Question No. 136 (UNSTARRED), answered on 2026-01-29
Subject: Financial Support for MSMEs
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Vijayakumar Alias Vijay Vasanth

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 136 TO BE ANSWERED ON: 29.01.2026

## FINANCIAL SUPPORT FOR MSMEs

## 136. SHRI VIJAYAKUMAR Alias VIJAY VASANTH:

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

- (a) the reasons for increasing Micro, Small and Medium Enterprises (MSMEs) classification limits without simultaneously providing a clear roadmap on the manner in which smaller enterprises would compete with larger MSMEs, thereby risking exclusion and monopolization of benefits;
- (b) the mechanisms that are in place to ensure that banks disburse these loans efficiently, given the enhanced  credit  guarantee  coverage  from  rupees  5  crore  to  rupees  10  crore  for  micro  and  small enterprises;
- (c) the reasons for not conducting independent assessment of whether doubling guarantee cover for startups and export-oriented MSMEs would genuinely increase credit access, or simply burden banks with high-risk lending obligations;
- (d) the  justification  for  issuing  rupees  5  lakh  credit  cards  to  micro-enterprises  when  most beneficiaries  may  lack  financial  literacy  or  awareness,  risking  misuse,  defaults  or  exclusion  of genuinely deserving units; and
- (e) whether  the  safeguards  exist  to  ensure  that  first-time  entrepreneurs,  particularly  women  and SC/ST  groups,  actually  benefit  from  the  support  of  rs.  ten  thousand  crore  under  Fund  of  Funds  to startups rather than well-connected individuals cornering these funds and if so, the details thereof?

## ANSWER

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

- (a): The  limits  of  investment  and  turnover  for  the  classification  of  Micro,  Small  and  Medium Enterprises (MSMEs) was revised to enable them for achieving higher efficiencies of scale, encourage adoption of technological up-gradation, better access to capital and to enhance global competitiveness. The revised classification is supported by a well designed framework that ensures continued support to Micro, Small and Medium Enterprises (MSMEs) through Priority Sector Lending, Public Procurement Preferences and various schemes &  programmes for ruling out the risk of exclusion and monopolization by larger MSMEs.
- (b) and (c): As informed by DFS, as per RBI, for loans up to 25 lakh to units in the Micro and Small Enterprises borrowers, banks are advised that the timelines for credit decisions shall not be more than 14  working  days.  For  loans  above  the  aforementioned  limit,  timelines  shall  be  as  per  the  Board approved sanction time norms. All credit related information pertaining to MSMEs including timelines for  credit  decisions,  indicative  document  checklist  etc.,  shall  be  displayed  under  a  separate  tab prominently on the bank's website.

As informed by CGTMSE, loan applications, amount sanctioned and disbursed by Banks under the Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) is being monitored on a quarterly basis by the Empowered Committee on MSME, chaired by Reserve Bank of India and the State Level Bankers' Committee [SLBC].

Further, in order to improve access to credit, the credit guarantee cover has been enhanced for MSEs, from Rs. 5 crore to Rs. 10 crore (w.e.f 01.04.2025) under CGS. As a result, a total of 1,778 guarantees amounting to Rs. 12,498 crore have been approved to MSEs in the slab of Rs. 5 crore to Rs. 10 crore in the FY 2025-26 till 31.12.2025.

(d): As informed by DFS, the objective of issuing credit cards to Micro Enterprises is to provide Udyam-registered micro enterprises with faster and easier access to credit for meeting their working capital requirements. The scheme also aims to promote digital transactions among MSMEs, enabling the  use  of  transaction  data  for  assessing  future  credit  needs  and  monitoring  end-use  of  funds.  The beneficiaries of the scheme shall be all Udyam-registered micro enterprises requiring working capital finance.

(e): The  Government  has  established  the  Fund  of  Funds  for  Startups  (FFS)  to  further  catalyze venture  capital  investments.  It  is  operationalized  by  Small  Industries  Development  Bank  of  India (SIDBI), which provides capital to SEBI-registered Alternative Investment Funds (AIFs) which in turn invest in startups. AIFs supported under FFS are required to invest at least two times of the amount committed under FFS in startups.

These AIFs have invested around Rs. 25,547.98 crore in 1,371 startups from across the country as on 31 st December 2025. Of this, Rs. 3,802.86 crore has been invested in 205 women-led startups as on 31 st December 2025.

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