Ministry of Micro, Small & Medium Enterprises (MSME) has been at the forefront of empowering small businesses through various credit facilitation schemes. The Ministry of Micro, Small & Medium Enterprises has played a pivotal role in promoting the growth of MSMEs through robust credit facilitation mechanisms. By providing access to credit, the government empowers small businesses, fosters entrepreneurship, and drives economic growth. Continued support and initiatives are vital for sustaining the momentum and ensuring the resilience of the MSME sector in India.
Ministry of Micro, Small & Medium Enterprises
Credit for Micro Small and Medium Enterprises
Posted On: 05 FEB 2024 3:38PM by PIB Delhi
The Government has taken various measures including ongoing schemes to facilitate access to credit to MSMEs in the country. Some of these include the following:
- Prime Minister’s Employment Generation Programme (PMEGP) which is a major credit-linked subsidy programme aimed at generating self-employment;
- Pradhan Mantri Mudra Yojna (PMMY) for providing loans up to Rs. 10 lakh to the non- corporate, non-farm small/micro enterprises;
- PM Vishwakarma Scheme: A Central Sector Scheme with budget outlay of Rs. 13,000 crore for its implementation during the period of 2023-24 to 2027-28. The scheme envisages to provide end-to-end holistic support including credit support, to artisans and craftspeople who work with their hands, using tools, in the 18 trades covered.
- Strengthen credit delivery system and to facilitate the flow of credit to the Micro and Small Enterprise sector without the hassles of collateral and third party guarantee up to a maximum of Rs. 5 crore through Credit Guarantee Scheme for Micro and Small Enterprises;
- Launch of Udyam Assist Platform on 11.01.2023 to bring Informal Micro Enterprises (IMEs) under the formal ambit of MSME for availing the benefits under Priority Sector Lending;
- Inclusion of Retail and Wholesale traders as MSMEs for the purpose of availing Priority Sector Lending benefits, w.e.f. 02.07.2021;
- Non-tax benefits extended for 3 years in case of an upward change in status of MSMEs;
- Trade Receivable Discounting System (TReDS) to facilitate the financing of trade receivables of MSMEs from corporate and other buyers including government departments and public-sector undertakings (PSUs) through multiple financiers electronically:
- Rs. 50,000 crore equity infusion through Self Reliant India (SRI) Fund;
- Rs. 5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS), for businesses, including MSMEs was announced during the COVID-19 pandemic to fulfil the credit gap in MSMEs. The scheme was operational till 31.03.2023.
The key figures on the performance of Prime Minister’s Employment Generation Programme(PMEGP) and Credit Guarantee Scheme for Micro and Small Enterprises during the last five years and the current year are given below:
- Prime Minister’s Employment Generation Programme:
| F.Y. | Units assisted | Estimated Employment Generated |
| 2018-19 | 73,427 | 5,87,416 |
| 2019-20 | 66,653 | 5,33,224 |
| 2020-21 | 74,415 | 5,95,320 |
| 2021-22 | 1,03,219 | 8,25,752 |
| 2022-23 | 85,167 | 6,81,336 |
| 2023-24 till 30.01.2024 | 65,324 | 5,22,592 |
- Credit Guarantee Scheme for Micro and Small Enterprises:
| F.Y. | Number of Guarantees approved | Amt. (₹ Crore) |
| 2018-19 | 4,35,520 | 30,169 |
| 2019-20 | 8,46,650 | 45,851 |
| 2020-21 | 8,35,592 | 36,899 |
| 2021-22 | 7,17,020 | 56,172 |
| 2022-23 | 11,65,786 | 1,04,781 |
| 2023-24 till 31.12.2023 | 11,02,548 | 1,35,668 |
This information was given by the Minister of State for Micro Small and Medium Enterprises, Shri Bhanu Pratap Singh Verma in a written reply to the Rajya Sabha today.
Development of MSME in the country
Towards achieving the ‘Viksit Bharat’ objective, the Ministry of Micro, Small and Medium Enterprises implements various schemes for the benefit of MSME sector across the country in the areas of formalization, technological assistance, infrastructure development, credit support, sustainable practices, skill development and training and market assistance to MSMEs. The schemes/programmes inter alia include Prime Minister’s Employment Generation Programme (PMEGP), MSME Champions Scheme, Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE), Entrepreneurship Skill Development Programme (ESDP), Micro and Small Enterprises-Cluster Development Programme (MSE-CDP), Procurement and Marketing Support Scheme (PMS) and National SC/ST Hub (NSSH).
In the recent past, Government has taken a number of initiatives to promote the MSME sector in the country, which inter alia include the following.
i. Revised criteria for classification of MSMEs to promote investment.
ii. “Udyam Registration” for MSMEs, for Ease of Doing Business w.e.f. 01.07.2020.
iii. Launch of Udyam Assist Platform (UAP) on 11.01.2023 to bring the Informal Micro Enterprises (IMEs) under the formal ambit for availing the benefit under Priority Sector Lending (PSL).
iv. Roll out of Raising and Accelerating MSME Performance (RAMP) programme with an outlay of Rs. 6,000 crore over 5 years.
v. Launch of MSME Champions scheme with the objective to modernize MSMEs’ manufacturing processes, reduce wastages, encourage innovativeness, sharpen business competitiveness and facilitate their National and Global reach and excellence. Components under the MSME Champions scheme are MSME-Sustainable (ZED), MSME-Competitive (Lean) and MSME-Innovative. MSME Sustainable (ZED) Certification Scheme encourages MSMEs to improve their processes and systems to enhance quality and also move towards sustainability.
vi. Expanding the network of Technology Centres across the country through ‘Technology Centre Systems Programme’ and ‘Establishment of new Technology Centres / Extension Centres’ to provide technology support to MSMEs, support import substitution and imparting high-end skilling.
vii. Launching of an online Portal “Champions” in June, 2020 to cover many aspects of e-governance including redressing grievances and handholding of MSMEs.
viii. Rs. 5 lakh crore Emergency Credit Line Guarantee Scheme for business, including MSMEs.
ix. Rs. 50,000 crore equity infusion through Self Reliant India Fund.
x. No global tenders for procurement up to Rs. 200 crores.
xi. Inclusion of Retail and Wholesale traders as MSMEs on 02.07.2021.
xii. Non-tax benefits extended for 3 years in case of an upward change in status of MSMEs.
xiii. As announced in Budget 2023-24, Rs. 9,000 crore has been infused in the corpus of CGTMSE to enable additional credit of Rs. 2 lakh crore with a reduced cost of credit.
As per the information received from Ministry of Statistics and Programme Implementation, the share of MSME Gross Value Added (GVA) in All India Gross Domestic Product (GDP) are as follows:
| Year | Share of MSME GVA in All India GDP (in %) |
| 2017-18 | 29.69% |
| 2018-19 | 30.50% |
| 2019-20 | 30.48% |
| 2020-21 | 27.24% |
| 2021-22 | 29.15% |
As per the information culled out from the Data Dissemination Portal of Directorate General of Commercial Intelligence and Statistics (DGCIS), the share of MSME related product exports in All India Exports during the last five years are as follows:
|
Year |
Share of MSME related Product exports in All India Exports (in %) |
| 2019-20 | 49.77% |
| 2020-21 | 49.35% |
| 2021-22 | 45.03% |
| 2022-23 | 43.59% |
| 2023-24 (Up to November, 2023) | 45.83% |
As per Udyam Registration portal (since inception on 01.07.2020 upto 30.01.2024), number of MSMEs registered under the National Industrial Classification (NIC) code 26305, ‘Manufacture of pagers, cellular phones and other mobile communication equipment’ is given below.
| NIC code | Description | Number of MSMEs registered | |||
| Micro | Small | Medium | Total | ||
| 26305 | Manufacture of pagers, cellular phones and other mobile communication equipment | 16,377 | 409 | 41 | 16,827 |
The Department of Commerce, Ministry of Commerce and Industry has informed that mobile phone manufacturing is predominantly characterized by large-scale operations. However, companies potentially classifiable as MSMEs are engaging in manufacturing feature phones in India. These companies primarily serve the lower end of the feature phone market. From a scenario where about 78% of the domestic demand by value was dependent on imports, the country has progressed to a stage where approximately 96% of mobile phones consumed domestically by value are now produced locally. This shift highlights the substantial growth in indigenous manufacturing capabilities.
The Department of Commerce, Ministry of Commerce and Industry has informed that currently, the core components of mobile phones, specifically active and passive components, are primarily being imported into India. Active components include semiconductors, diodes, and transistors and passive components include inductors, resistors, and capacitors. The import value of these core components is estimated to be approximately USD 15-18 billion per year.
This information was given by the Minister of State for Micro Small and Medium Enterprises, Shri Bhanu Pratap Singh Verma in a written reply to the Rajya Sabha today.
