India Launches Rs 100 Crore Credit Guarantee Scheme for MSMEs

The Indian government has launched the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME), providing a 60% credit guarantee on loans up to ₹100 crore to enhance access to financing for the manufacturing sector. This initiative, part of the FY25 Budget announcement, aims to support MSMEs in purchasing essential equipment and machinery, which is crucial for their growth and operational scaling. Eligible MSMEs must possess a valid Udyam Registration Number, and the scheme is expected to bridge a significant credit gap, addressing historical financing challenges faced by these enterprises. Industry experts, including Ajay Sahai of the Federation of Indian Export Organisations, believe this scheme will significantly improve financial accessibility, ultimately boosting production capacity and global competitiveness. The program will be operational for four years or until a cumulative guarantee of ₹7 lakh crore is reached, whichever comes first, and is aligned with the government's 'Make in India' initiative. Overall, this scheme is anticipated to accelerate manufacturing growth and create job opportunities across the country.