What is the focus of the Union Budget 2024 for MSMEs?

The Budget focuses on developing in-house capabilities for credit assessment of MSMEs and improving their financial inclusion.

What are the key benefits announced for MSMEs in the Union Budget 2024?

Key benefits include timely access to credit, loans without collateral or third-party guarantees, and a Rs. 100 crore credit guarantee scheme for MSMEs.

How will in-house credit assessment capabilities benefit MSMEs?

In-house capabilities will enable faster decision-making, reduce reliance on external agencies, and offer better financial products tailored to MSMEs' needs.

Is FM Sitharaman launches credit scheme to boost MSMEs in India?

Yes, Finance Minister Nirmala Sitharaman recently launched initiatives to expand MSME credit access, including digital credit delivery, upgraded guarantee schemes, and improved loan processing speed.

Which is better, LC or BG?

Letters of Credit (LC) are better for trade transactions requiring assured payment, while Bank Guarantees (BG) are better for contracts needing performance security. The choice depends on whether payment assurance or performance assurance is required.

What is the Budget for MSME 2024-25?

The MSME Ministry received an estimated allocation of around ₹22,000 crore for 2024–25, aimed at supporting credit, technology upgradation, cluster development, and skill programmes.

What is the new credit assessment model for MSME?

The new credit assessment model for MSMEs focuses on cash-flow–based lending instead of traditional collateral-based checks. It uses GST data, bank statements, and digital footprints to assess repayment capability more accurately.

What is credit guarantee scheme for MSME Budget 2024?

The 2024 Budget strengthened the Credit Guarantee Scheme (CGTMSE) by increasing guarantee coverage and reducing guarantee fees. It helps MSMEs get collateral-free loans at lower interest rates.

Is 700 to 750 a good CIBIL score?

Yes, a CIBIL score between 700 and 750 is considered good and improves your chances of getting loans approved at favourable interest rates.

What are the new MSME guidelines 2025?

New MSME guidelines for 2025 emphasise digital compliance, Udyam Verification, faster payment settlement by PSUs, and enhanced credit support through updated guarantee norms and cash-flow-based lending.

What is the new MSME rule in 2024?

The 2024 MSME rule mandates Udyam Verification, strengthens delayed payment mechanisms, and promotes digital invoicing to ensure transparency and faster credit availability.

What is the new MSME rule in 2024?

The 2024 MSME rule mandates Udyam Verification, strengthens delayed payment mechanisms, and promotes digital invoicing to ensure transparency and faster credit availability.

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FM Sitharaman's Budget 2024 On MSME Credit Assessment

Pragya Pathak

Author

Updated: 27-11-2025 at 5:30 PM

Nirmala Sitharaman presents the Union Budget for FY 2024-25 on July 23 at the Lok Sabha. The Union Budget 2024-25 highlights its focus on poverty, women, youth, and farmers. As for the Budget 2024 Income Tax Updates, Nirmala Sitaraman has also announced a review of the Income Tax Act 1961 to help the middle class.

The Union Cabinet, headed by PM Narendra Modi, approved the full Union budget for 2024-25. However, the public does not seem too happy about the key budget announcements. The public is showing its disagreement in a humorous sense; multiple posts have been put up on all platforms, playfully trolling the Nirmala Sitharaman budget announcement.

Let’s take a look at what the 2024 Interim-Union budget of India has planned for MSMEs, as mentioned in the Budget 2024 PDF.

What Does The Union Budget 2024-25 Have To Offer To The MSMEs?

In the India budget 2024, Nirmala Sitharaman has announced that the Indian government will focus on developing in-house capabilities for credit assessment of MSMEs. This decision aims to improve the financial inclusion of MSMEs to help them grow.

The government has decided to focus on MSMEs as they contribute significantly to the GDP and employment of the nation, but still face multiple issues that have not been dealt with. MSMEs mainly face financial crunches and do not get adequate credit on time.

Building in-house Capabilities announced in the 2024 Interim-Union budget of India aims to gather all public sector banks to establish their own teams and systems for credit assessment. This aims to reduce the reliance of MSMEs on external agencies and also help banks understand the needs and risks associated with lending funds to MSMEs.

How Will This Benefit MSMEs?

The Union Budget 2024-25 aims to help Micro, Small, and Medium Enterprises financially. Let’s understand the benefits Micro, Small, and Medium Enterprises will be receiving through the budget of 2024-25:

Timely Credit Access

One of the biggest challenges faced by the MSMEs is of delay in getting credit, which disrupts the whole operation of the small business unit. As the budget has introduced an in-house credit assessment system within public sector banks, MSMEs no longer have to struggle to get funds. This change will not only reduce the approval time for loans but will also direct them toward opportunities where they can get faster loans with better terms.

No Collateral

The Union Budget 2024 has also announced that loans taken by MSMEs no longer have to have collateral or third-party guarantees. The government announced a 100 crore credit guarantee scheme, which has turned out to be a major relief for the Micro, Small, and Medium Enterprises. Without the burden of providing or depositing collateral, more and more entrepreneurs are encouraged to apply for various kinds of loans for the growth of their businesses. The government is bringing back the old trust-based lending approach, which will not only encourage entrepreneurs to take loans but also encourage innovation and expansion of the MSME sector.

Better Financial Health

By receiving funds way quicker than they used to, MSMEs will be contributing even more to the economy and will not have to worry about money constraints anymore. Stable and predictable access to funds allows Micro, Small, and Medium Enterprises to avoid taking loans with a higher rate of interest, manage working capital better, and overall, strengthen their overall monetary resilience. As the government is helping the MSMEs in managing their financial capital better, they can put more focus on improving their productivity, incorporating modern technology, and hiring skilled workers.

Conclusion

The government budget 2024 reflects the Indian government’s commitment toward making a better and growth-oriented ecosystem for Micro, Small, and Medium Enterprises (MSMEs) as they are crucial for the growth of the whole nation. By the introduction of measures, like in-house credit assessment capabilities and a 100 crore credit guarantee scheme, the budget aims to reduce the credit problems that MSMEs often face.

Overall, the budget aims to provide proper and needed support to MSMEs so that they can contribute more efficiently and effectively to the national economy. With an inclusive focus on addressing credit facility and employment, the government of India is focusing on building more stronger and future-ready MSME sector.

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