The MSME sector may soon receive a financial boost as the Finance Ministry considers new policy measures to improve access to finance and loans, according to industry sources.

“The government aims to improve access to funds for MSMEs, and banks have been approached to support this initiative,” a senior official said. Business Today TV.

If funding is increased, it could not only strengthen the working capital of MSMEs but also support job creation – an important priority of the government, according to sources.

This proposed scheme will differ from the credit guarantee scheme announced in the Union Budget, which introduced a new scheme specifically for MSMEs in the manufacturing sector to obtain loans for equipment and machinery without third party collateral or guarantees .

According to sources, the credit guarantee scheme, which covers loans up to Rs 100 crore, is currently undergoing an inter-ministerial review and is expected to be launched soon.

Recent RBI data shows a 13.3% year-on-year growth in advances to micro and small enterprises, with medium enterprises registering a growth of 17.2%, while FY23 and FY24 data shows a slowdown of the growth of loans to micro-small and small businesses. medium enterprises at 10.2 percent and 9.7 percent, respectively, compared to 28.3 percent and 36.8 percent, respectively, in 2022-23.

Additionally, Union Finance Minister Nirmala Sitharaman introduced a mechanism in the Budget to help MSMEs maintain access to credit during financially difficult times. The facility aims to support MSMEs in the “Special Mention Account” (SMA) phase, ensuring credit continuity to prevent their loans from becoming non-performing assets (NPAs).

Union Finance Minister Nirmala Sitharaman is expected to meet MSMEs in Bengaluru and inaugurate several SIDBI branches on November 9.