The government will soon launch a new credit guarantee scheme for the MSME sector covering loans up to ₹100 crore, DFS Secretary M Nagaraju said on Thursday. 

Addressing the concluding session of the Grameen Bharat Mahotsav (GMB) 2025 in the capital, Nagaraju said, “We are likely to come up with a scheme, which was announced by Finance Minister in her last Budget, that could provide loans up to ₹100 crore without guarantee, if they are already having the enterprise”. 

The scheme is likely to be placed before the Union Cabinet soon for its approval. Finance Minister Nirmala Sitharaman had announced in Budget 2024-25, “For facilitating term loans to MSMEs for purchase of machinery and equipment without collateral or third-party guarantee, a credit guarantee scheme will be introduced. The scheme will operate on pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to ₹100 crore, while the loan amount may be larger”. 

The GMB 2025 was an initiative of the Department of Financial Services (DFS) and National Bank for Agriculture and Rural Development (NABARD) celebrating rural India’s growth and potential. 

Rural tranformation

The six-day Mahotsav brought together stakeholders from across the country to envision an empowered rural India. The event underscored the government’s commitment to rural transformation, aligning with the goal of achieving a “Viksit Bharat” by 2047.

GMB 2025 was inaugurated, on January 4 by Prime Minister Narendra Modi in the presence of Finance and Corporate Affairs Minister Nirmala Sitharaman and Pankaj Chaudhary,Minister of State for Finance. 

More lending

Meanwhile, Nagaraju on Thursday said the government is very keen to lend more to rural areas through its various schemes. From a level of ₹ 8.5 lakh crore in 2015, rural credit has expanded to ₹25 lakh crore in 2023-24, he added. “We want to increase agricultural credit by several times. Agricultural credit was 8.5 lakh crore in 2015”, he said. 

As the country surges ahead, he said, there is need to focus on four things: quality, linkages for exports, capacity building, and support to achieve the vision of Vikshit Bharat.

Nagaraju said that the Mahotsav has brought to light the vast potential of rural India as a driver of nation’s economic progress. With over 53 crore Jan Dhan accounts, primarily held by women and rural communities, and 14.4 million self-help groups (SHGs) fostering financial inclusion, the event underscored the critical role of grassroots resilience, innovation, and entrepreneurship. 

Initiatives such as Lakhpati Didi, agricultural credit worth ₹25 lakh crore annually and dedicated support for FPOs in every State reflect government’s unwavering commitment to empowering rural communities, especially women entrepreneurs, he added.