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It is still extremely difficult for MSEs to get credit despite success of CGTMSE: DC MSME Shailesh Kumar Singh

Credit and Finance for MSMEs: CGTMSE scheme offers guarantee cover to lenders for collateral-free lending to micro and small enterprises (MSEs).

shailesh kumar singh msme
Urging small businesses to register on the Udyam portal, Singh said the platform is a gateway to avail government facilities offered to MSMEs. (Image: India SME Forum event screenshot)

Credit and Finance for MSMEs: Even as the government’s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme to enable collateral-free loans has been very successful, the fact remains it is still extremely difficult for MSEs to get credit, MSME Ministry Development Commissioner Shailesh Kumar Singh said on Wednesday. “We need to work more on this and any suggestions are most welcome,” Singh said during a panel discussion at an event organised by MSME association India SME Forum and Axis Bank.

CGTMSE scheme offers guarantee cover to lenders for collateral-free lending to micro and small enterprises (MSEs). The scheme had approved over 7 lakh guarantees cumulatively for Rs 55,217.74 crore in FY22, the second highest in eight years, according to government data. This was 14 per cent up from 6.19 lakh guarantees approved in FY21. Moreover, Finance Minister Nirmala Sitharaman in this year’s budget had announced revamping the scheme with the required infusion of funds to facilitate additional credit of Rs 2 lakh crore for MSEs.

However, the share of bank credit to MSEs amounting to Rs 13.12 lakh crore in February 2022 was 11.2 per cent of India’s gross bank credit at Rs 116.27 lakh crore, according to the latest data on sectoral deployment of bank credit by the Reserve Bank of India.

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Urging small businesses to register on the Udyam portal, Singh said the platform is a gateway to avail government facilities offered to MSMEs. The development commissioner also touched upon the ministry’s focus on addressing the deficiencies for MSMEs in accessing credit, infrastructure and technology, and marketing support along with the need to add more technology centres for MSMEs. In addition to the existing 18 technology centres offering precision tooling facilities, work on 15 new centres has been underway. 

“Our ministry has been working closely with other ministries and departments to facilitate ease of doing business for MSMEs. Recently we have initiated work on linking of Udyam portal with e-Shram, National Career Service (NCS), and Atmanirbhar Skilled Employee-Employer Mapping (ASEEM) portals. The success of the ministry’s programmes and schemes depends on the active participation of stakeholders. An enabling environment is possible only if all stakeholders work towards the common goal,” MSME Secretary BB Swain said in his address at the event.

MSME Minister Narayan Rane in his remarks assured MSMEs of providing all necessary support to realise the government’s Atmanirbhar Bharat vision.

The event also felicitated 100 MSMEs including 55 small, 28 medium and 17 micro businesses with awards across agriculture, chemicals, energy, pharmaceuticals, logistics, and other sectors. Maharashtra-based MSMEs had received the highest number of awards followed by Gujarat and Karnataka. “While it has been our constant endeavour to undertake measures to boost MSMEs and entrepreneurship, this association with the Indian SME Forum is to help SMEs network and promote themselves to their partners, investors and collaborators, raise capital and gain a global footprint,” said Amitabh Chaudhry, MD and CEO, Axis Bank.

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