Nirmala Sitharaman said this will enable collateral for Rs 2 lakh crore loans to MSMEs. (PTI Photo)
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In a big relief to Covid-hit micro, small and medium enterprises (MSMEs), Union Finance Minister Nirmala Sitharaman on Wednesday announced that the Credit Guarantee Scheme for MSMEs will be extended with an infusion of Rs 9,000 crore.
While announcing the Union Budget, Sitharaman said this will enable collateral for Rs 2 lakh crore loans to MSMEs. This is expected to boost fund flow to the distressed and fund-starved MSME sector. The proposed scheme will take effect from April 1, 2023.
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According to bankers, the scheme will give comfort to banks which are normally reluctant to lend to MSMEs in the absence of proper collateral.
A sales representative of an electronics store watch live telecast of Union budget 2023 on Wednesday in Ahmedabad. (Express photo by Nirmal Harindran)
The government’s Emergency Credit Line Guarantee Scheme (ECLGS) was earlier extended up to March 2023 from March 2022. Its guarantee cover was also expanded by Rs 50,000 crore to a total cover of Rs 5 lakh crore with the additional amount being earmarked exclusively for hospitality and related enterprises.
