Government’s big announcement for small businessmen, MSMEs will get cheap loans and help worth thousands of crores

MSME Government Support Scheme: The central government has taken a big step to promote India’s exports. The Commerce Ministry has launched two new components under the Export Promotion Mission (EPM), which will directly benefit the country’s Micro, Small and Medium Enterprises (MSMEs).

The objective of these initiatives is to provide cheap export credit to MSMEs, reduce their costs and increase their competitiveness in the global market. This initiative is considered important at a time when the challenges of international trade and the pressure of American tariffs have affected small businesses.

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Interest subsidy for six years

Interest subsidy scheme on pre and post-shipment export credit has been implemented under the export promotion initiative. This scheme will be applicable from 2025 to 2031 and the government will spend about Rs 5,181 crore on it.

In the initial phase, eligible MSMEs will get loans at interest rates up to 2.75 percent less than the current market rate. This interest rate will be floating and will be linked to the repo rate, so that it can change according to the economic conditions.

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Promotion of exports in new markets

The government’s focus is not limited to just providing cheap credit, but is also on increasing the scope of exports. MSMEs who send their products to new and emerging international markets will be given additional incentives.

Detailed notification in this regard will be issued later. Its objective is to diversify Indian exports, so that dependence on some selected countries can be reduced and more markets can be accessed.

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Easy bank loan against low collateral

The second important initiative is related to collateral support for export credit. Under this scheme, MSMEs will be able to take bank loans with less collateral or third party guarantee. This scheme will be implemented through CGTMSE i.e. Credit Guarantee Fund Trust for Micro and Small Enterprises.

Generally, due to lack of collateral, MSMEs have to pay 9.5 to 12.5 percent interest, but the new schemes will reduce their financing cost. This will reduce production costs and Indian products will become more competitive in the global market.

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