Government Infuses INR 9,000 Cr To Expand Credit And Support Micro Enterprises

The Government of India has announced a major capital infusion of INR 9,000 crore into the Credit Guarantee Fund Trust for Micro and Small Enterprises.

The move is aimed at enabling additional credit of INR 2 lakh crore for small businesses at a lower cost of borrowing. The measure is part of the Credit Guarantee Scheme for Micro and Small Enterprises under the Ministry of MSME.

Along with the infusion, the guarantee limit for each enterprise has been increased from INR 5 crore to INR 10 crore, widening the safety net available to eligible borrowers.

The reforms were outlined in a written response to Parliament by the Minister of State for MSMEs. The ministry said that the overall package is intended to ease access to finance, promote technology adoption, ensure timely payments, and reduce regulatory challenges faced by small businesses across the country.

To support timely settlement of payments, the government highlighted the role of the SAMADHAAN portal, launched in 2017 to monitor delayed dues owed to micro and small enterprises. In addition, 161 Micro and Small Enterprises Facilitation Councils have been set up across states and union territories to speed up dispute resolution related to unpaid payments.

Efforts to improve cash flow for small businesses also include expansion of the Trade Receivables Discounting System. Corporates and central public sector enterprises with a turnover of at least INR 250 crore will now be onboarded, allowing more small firms to access electronic discounting of receivables.

The ministry also listed other support measures for the sector. These include subsidies for new micro businesses under the Prime Minister's Employment Generation Programme, interest subvention loans for artisans and craftspeople under the PM Vishwakarma scheme, and equity support through the Self Reliant India Fund. The fund aims to channel up to INR 50,000 crore into small enterprises through a combination of government and private investment.

To reduce compliance burdens, the ministry noted the launch of the fully digital Udyam Registration Portal in 2020 and the Udyam Assist Platform in 2023 to formalise informal enterprises. The national single window system also continues to streamline approvals by integrating procedures across ministries and state governments.