Presenting the Union Budget 2024-25, FM Nirmala Sitharaman said the Centre plans to open 24 such branches by the end of this year
MSMEs were a key focus area for the finance minister with an aim to give a further impetus to economic growth and create jobs
The finance minister also said that the Centre will introduce a credit guarantee scheme for MSMEs in the manufacturing sector
The Small Industries Development Bank of India (SIDBI) will open new branches to expand its reach to serve all major MSME clusters within three years and provide direct credit to them, finance minister Nirmala Sitharaman said.
Presenting the Union Budget 2024-25, Sitharaman said the Centre plans to open 24 such branches by the end of this year, expanding SIDBI’s service coverage to 168 out of 242 major MSME clusters.
MSMEs were a key focus area for the finance minister with an aim to give a further impetus to economic growth and create jobs. Sitharaman also said that the Centre will introduce a credit guarantee scheme for MSMEs in the manufacturing sector.
As part of the initiative, the Indian government will help MSMEs get term loans for purchase of machinery and equipment without having to submit any collateral or third-party guarantee.
“The scheme will operate on pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to ` 100 crore, while the loan amount may be larger,” the FM said.
The borrower will be required to pay a guarantee fee upfront, in addition to an annual guarantee fee on the reducing loan balance.
With an eye on increasing exports via MSMEs, Sitharaman announced that the government will set up ecommerce export hubs in a public-private partnership model.
The announcements come days after SIDBI bagged $24.5 Mn from Green Climate Fund (GCF) for its maiden anchored sustainability and climate focussed fund Avaana Sustainability Fund (ASF).
Earlier this year, SIDBI also entered into an agreement with Bihar Startup Fund Trust to administer the INR 50 Cr Bihar Startup Scale-up Financing Fund (BSSFF).
