Boosting MSME Resilience Amid West Asia Crisis

The Ministry of Small and Medium Enterprises is considering a new credit guarantee scheme akin to the ECLGS to aid MSMEs amid the ongoing West Asia crisis. This decision follows a discussion with the Department of Financial Services, as noted by Rajneesh, Additional Secretary in the MSME Ministry, on Wednesday.

The Emergency Credit Line Guarantee Scheme, launched in May 2020 under the Aatmanirbhar Bharat Abhiyan, initially supported MSMEs impacted by the COVID-19 pandemic. The scheme proved crucial in helping enterprises meet operational liabilities and restart businesses. Field officers maintain close ties with industry associations to ensure continued supply of raw materials, achieving a 12.5% increase in provision.

Despite international economic challenges, more than 20 lakh MSMEs registered on the Udyam portal in early 2023, surpassing eight crore total registrations. The credit flow to these entities remains a priority, with outstanding credit exceeding Rs 36.7 lakh crore and a notable 23.5% growth in the last quarter. The RBI's recent move to double collateral-free lending limits further bolsters support for this sector.