The government has set ambitious targets for MSME credit flow, raising the lending target for banks and non-banking financial companies (NBFCs) to Rs 5.75 trillion for FY25
A Rs 100 crore credit-guarantee scheme is set to be approved, offering collateral-free loans to MSMEs
This scheme builds on the success of ECLGS and aims to boost manufacturing and exports without requiring collateral
Loans to MSMEs have grown by 20.1 per cent year-on-year as of March 2024. Despite this, 99 per cent of MSMEs are microenterprises lacking scale
Enhancements like the Unified Lending Interface (ULI) and deepening of the Account Aggregator (AA) framework are expected to improve financing options for small businesses
PSBs have seen a decline in Mudra loan NPAs to 3.4 per cent in FY24, down from 4.89 per cent in FY20. Private banks performed even better, with NPAs at just 0.95 per cent
A focused push towards institutional credit flow can help these enterprises compete effectively in the domestic and global markets