Budget 2023: Credit Guarantee Scheme for MSMEs gets Rs 9,000-cr boost

This is expected to reduce the cost of credit by 1 per cent for MSMEs, said Union Finance Minister Nirmala Sitharaman

bank, credit, growth, loans, funding, capital, cash, m&a, payment
Abhijit Lele New Delhi
1 min read Last Updated : Feb 01 2023 | 8:00 PM IST
The government will infuse Rs 9,000 crore into the Credit Guarantee Scheme for micro, small and medium enterprises (MSMEs), enabling lenders to dispense additional credit worth Rs 2 trillion.

This is expected to reduce the cost of credit by 1 per cent for MSMEs, said Union Finance Minister Nirmala Sitharaman on Wednesday.

Last year, the government mooted revamping the scheme; the revised scheme will come into effect from April 2023.

A K Goel, chairman, Indian Banks’ Association (IBA) and MD & CEO, Punjab National Bank, said: “An enhanced corpus of the scheme for MSMEs, and less stringent contract execution would encourage the flow of credit to MSMEs.”

Referring to the impact of the scheme, Sarosh Amaria, MD, Tata Capital Financial Services said it would help plug working capital gaps for small businesses.

Gurpreet Chhatwal, managing director, CRISIL Ratings, was of the view that MSMEs, which are yet to recover fully from Covid disruptions, would benefit from the revamped Credit Guarantee Scheme.

Demand from NBFCs was to advance hassle-free credit access. An allocation of Rs 9,000 crore would be a big relief to MSMEs in the current inflationary conditions, said Shachindra Nath, vice-chairman and MD, U GRO Capital.

One subscription. Two world-class reads.

Already subscribed? Log in

Subscribe to read the full story →
Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

Topics :Budget 2023MSMEscapital infusion

Next Story