Government of India has undertaken a series of innovative schemes for enhancing credit flow and ensuring sustainable growth of the MSMEs. An overview of the schemes are provided below. Innovative schemes for MSME Pradhan Mantri MUDRA Yojana (PMMY) PMMY has played a pivotal role in empowering non-corporate, non-farm small and micro enterprises by providing loans of up to ₹10 lakh. To strengthen support for aspiring entrepreneurs, an increase in the loan limit to ₹20 lakh was announced in the Union Budget 2024-25 on July 23, 2024. This new limit came into effect from October 24, 2024. StandUp India Stand Up India (SUPI) Scheme facilitates bank credit to Women and SC/ST entrepreneurs in setting up greenfield enterprises. PM Vishwakarma Scheme Recognizes and supports traditional artisans and craftspeople. Provides skill training, financial assistance (up to ₹3 lakh loan), and marketing support. Prime Minister’s Employment Generation Programme (PMEGP) Credit-linked subsidy scheme for setting up micro-enterprises. Subsidy: 15-35% of project cost (up to ₹50 lakh for manufacturing and ₹20 lakh for services). Special category beneficiaries (SC/ST/Women/Ex-servicemen) get higher subsidy. Special Credit Linked Capital Subsidy Scheme SCLCSS was introduced under National SCST Hub (NSSH) with the objective to promote new enterprises and support the existing enterprises in their expansion for enhanced participation in the public procurement. Subsidy of 25% has been provided to the eligible SC-ST MSEs of manufacturing as well as service sector under NSSH on institutional finance up to ₹1 crore, for procurement of plant & machinery / equipment (i.e., a subsidy cap of ₹25 Lakhs). Credit Guarantee Schemes Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE): CGTMSE provides credit guarantee for collateral-free loans up to ₹10 crore to eligible MSEs. The coverage is 85% for micro-enterprises (loans up to ₹5 lakh) and 75% for others. Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME): This scheme provides for 60% guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs viz., SCBs, AIFIs and NBFCs) for collateral-free term loan assistance upto ₹100 crore sanctioned to eligible MSMEs for the purchase of equipment / machinery with the minimum cost of such equipment / machinery being at least 75 per cent of the project cost. Credit Guarantee for Pradhan Mantri Mudra Yojana (PMMY): Loans up to ₹20 lakh are provided with the backing of a credit guarantee provided by the Credit Guarantee Fund for Micro Units (CGFMU), managed by the National Credit Guarantee Trust Company Ltd (NCGTC). Credit Guarantee Scheme for Start-ups (CGSS): CGSS, provides for guarantee against the credit instruments extended by Member Institutions (MIs viz., Banks, FIs, NBFCs, SEBI registered Alternative Investment Funds) to finance eligible startups recognized by DPIIT. During the Union Budget 2025-26, the guarantee cover under CGSS has been increased from the present level of ₹10 crore to ₹20 crore and guarantee fee stands reduced to 1 % for loans in 27 priority sectors. New credit scoring model The Government has launched a new Credit Assessment Model for micro and small enterprises based on scoring their digital footprints which was announced in Union Budget, July 2024. This credit assessment model will leverage the digitally fetched and verifiable data available in the ecosystem and devise automated journeys for MSME Loan appraisal using objective decisioning for all loan applications and model-based limit assessment for both Existing to Bank (ETB) as well as New to Bank (NTB) MSME borrowers. The digital footprints used by the model may include Name and Pan authentication using NSDL, Mobile and email verification using OTP, API fetch of GST data through service providers, Bank Statement Analysis using account aggregator, ITR upload and verification, API enabled commercial and consumer bureau fetch and due diligence using CICs, fraud checks,Hunter checks through APIs, among others. MSME developmental schemes Micro & Small Enterprises Cluster Development Programme (MSE-CDP) Supports infrastructure development and common facility centers for MSME clusters. GoI assistance: Up to 80% of project cost (₹30 crore for Common Facility Centers, ₹15 crore for infrastructure). Entrepreneurship and Skill Development Programme (ESDP) Provides training and skill development for new and existing entrepreneurs. Includes Entrepreneurship Awareness Programs, Skill Development Training, and Advanced Management Programs. Assistance to Training Institutions (ATI) Scheme Financial assistance up to ₹3 crore for strengthening MSME training institutions for state-level institutions. Coir Vikas Yojana (CVY) Supports modernization and skill development in the coir industry; includes Mahila Coir Yojana (women-focused self-employment program). Procurement and Marketing Support (PMS) Scheme Helps MSMEs participate in trade fairs, exhibitions, and vendor development programs. Provides support for packaging, e-commerce, and market access. International Cooperation (IC) Scheme Supports MSMEs in participating in international trade fairs and exhibitions. Provides financial assistance for airfare, stall rent, and market research. National SC-ST Hub Scheme Supports SC/ST entrepreneurs in procurement and business development. Provides subsidies for machinery, loan processing fees, and marketing support. A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE) Focuses on setting up Livelihood Business Incubators (LBIs) in rural areas. Provides up to ₹1 crore for government institutions and ₹75 lakh for private institutions. Khadi Gramodyog Vikas Yojana Supports Khadi artisans and institutions through financial assistance. Includes Modified Market Development Assistance (MMDA) and Interest Subsidy Eligibility Certificate (ISEC) Scheme. Tool Rooms and Technical Institutions Provides skill training and access to advanced manufacturing technologies for MSMEs. Includes 18 tool rooms across India MSME Champions Scheme Merges multiple schemes to enhance MSME competitiveness, such as: MSME Sustainable (ZED) Certification – Promotes quality and environmental compliance. MSME Innovative – Supports startups, incubation, and intellectual property. MSME Competitive (Lean) Scheme – Focuses on reducing production wastage and increasing efficiency. Raising and Accelerating MSME Performance (RAMP) World Bank-supported scheme to improve MSME access to finance, technology, and markets. Aims to benefit over 5.5 lakh MSMEs by FY2026-27. Scheme of Fund for Regeneration of Traditional Industries (SFURTI) The scheme aims to sustainably increase income of artisans by organizes traditional artisans into collectives or clusters, facilitating product development, diversification, and value addition. Since FY2014-15, SFURTI has approved the formation of 513 clusters and 376 clusters have successfully become functional. Source : Understanding Indian MSME Sector Report by SIDBI