The Union Budget 2025 Viksit Bharat has introduced a highly beneficial reform for Micro, Small, and Medium Enterprises (MSMEs). The Indian government has doubled the credit guarantee cover from ₹5 crore to ₹10 crore, giving small businesses greater financial support. This move matches India’s vision of a Viksit Bharat (Developed India) by encouraging entrepreneurship, job creation, and economic growth.
In this blog we will look at what this means for MSMEs, how it impacts business financing, and how entrepreneurs can benefit from this budget update.
What Is the MSME Credit Guarantee Scheme?
The Credit Guarantee Scheme (CGS) for MSMEs was introduced to help small businesses access loans without collateral on 30 August,2000. The scheme, managed by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), ensures that MSMEs receive financial support, even if they don’t have assets to submit as security.
Key Highlights of the 2025 Update
- Credit guarantee limit increased from ₹5 crore to ₹10 crore
- Easier loan approvals for MSMEs
- Lower default risk for banks, encouraging more lending
- Boost to small business growth under the Viksit Bharat initiative
How Will This Benefit MSMEs?
With the credit guarantee limit increased to ₹10 crore, MSMEs will have greater access to funds, allowing them to:
- Expand operations – More working capital for scaling businesses
- Invest in technology – Updating processes for higher efficiency
- Hire more employees – Creating job opportunities across India
- Boost exports – Enhancing global trade competitiveness
Fact: As of 2024, MSMEs contributed 30% to India's GDP and employed over 110 million people. With increased financial support, this number is expected to rise massively in 2025.
Credit Guarantee: A Step towards ‘Viksit Bharat’
The Union Budget 2025 Viksit Bharat focuses on making India a $5 trillion economy by helping small businesses grow. MSMEs are the backbone of economic growth, and this move will:
- Increase MSME participation in manufacturing & exports
- Encourage innovation & entrepreneurship
- Create more jobs, reducing unemployment
- Be a step ahead in the ‘Make in India’ mission
According to government estimates, 50 lakh MSMEs are expected to benefit from this credit guarantee expansion.
How MSMEs Can Apply for the Credit Guarantee Scheme from the Union Budget 2025
If you're an MSME looking for the ₹10 crore credit guarantee, here's how you can apply:
Check Eligibility – Businesses registered under MSME laws can apply Approach Banks & NBFCs – Apply through registered financial institutions Submit Business Plan – Show your business's financial projections Get Approval & Funding – If approved, receive loan support under CGTMSE
Pro Tip: If you are still confused about loan documentation you can talk to experts and increase your chances for approval.
Conclusion: A New Era for MSME Growth By The Union Budget 2025
The Union Budget 2025 Viksit Bharat is all set to help the MSMEs grow by increasing the credit guarantee cover to ₹10 crore.
This policy change will not only result in economic growth but also work towards job creation, and business expansion, bringing India closer to its goal of becoming Viksit Bharat by 2047.
Are you an MSME owner looking for funding? Start preparing your loan application today and take advantage of this highly awarding financial support!
FAQs on MSME Credit Guarantee Scheme of Union Budget 2025
Q1: What is the new credit guarantee limit for MSMEs in 2025?
The credit guarantee cover has increased from ₹5 crore to ₹10 crore under the Union Budget 2025 Viksit Bharat.
Q2: How does the credit guarantee scheme help small businesses?
It allows MSMEs to get collateral-free loans, making it easier to access funds and grow their businesses.
Q3: Who can apply for the MSME credit guarantee scheme?
All registered MSMEs engaged in manufacturing, services, and trading activities are eligible.
Q4: Where can I apply for an MSME loan under this scheme?
You can apply through banks, NBFCs, and government-registered financial institutions.
Disclaimer: The information presented in this blog is sourced from various online platforms and government portals.