Budget 2024: Credit Support For MSMEs, Increased Mudra Loan Limit
Finance Minister Nirmala Sitharaman proposed in Budget 2024 a big push for micro, small, and medium enterprises (MSMEs), including an increased limit on Mudra loans from Rs 10 lakh to Rs 20 lakh, aiming to strengthen the start-up system in India.
The limit has been increased for those MSME owners who have availed of and successfully repaid the loans.
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Sitharaman announced a new mechanism for the continuation of bank credit to MSMEs during their stress period. MSMEs can take out loans without being required to provide any collateral or third-party guarantee.
For MSMEs in the manufacturing sector, she announced a credit guarantee scheme worth Rs 100 crore.
“While the loan amount may be larger, the borrower will have to provide an upfront guarantee fee and an annual guarantee fee on the reducing loan balance,” said Sitharaman.
Launched in 2015, the Pradhan Mantri Mudra Yojna offers loans up to Rs 10 lakh to small and micro firms from commercial, small finance, and non-banking financial firms. In the last financial year, the centre sanctioned Mudra loans worth Rs 5.4 lakh crore.
The finance minister said that the Small Industries Development Bank of India (SIDBI) will open new branches to serve more MSMEs in the next three years. It aims to open 24 new branches in the current FY to serve MSME clusters.
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The Union Budget also has provisions for financially aiding 50 multi-product irradiation units in the MSME sector.
Moreover, the central government proposed to reduce the turnover threshold of MSME buyers for mandatory onboarding on TReDs, an online platform to help MSMEs, from Rs 500 crore to Rs 250 crore.
