India Announces Collateral-Free Loans for MSMEs

Union Finance Minister Nirmala Sitharaman announced that the Indian government will introduce a Rs 100 crore credit guarantee scheme for Micro, Small, and Medium Enterprises (MSMEs) to enhance access to collateral-free loans. This initiative, part of the recent budget, aims to support MSMEs by eliminating the need for third-party guarantees and allowing banks to develop their own credit assessment models. The new scheme is expected to address long-standing grievances regarding access to working capital and term loans. Additionally, the establishment of e-commerce trade hubs and the opening of new branches of the Small Industries Development Bank of India (SIDBI) will further bolster MSME growth. Meanwhile, in Saint Lucia, the MSME Loan Facility programme has been extended due to strong demand, with plans for additional funding to sustain its impact. Both countries demonstrate a commitment to strengthening their MSME sectors, which are vital for economic development.