Finance Minister Nirmala Sitharaman Launches Mutual Credit Guarantee Scheme to Provide Collateral-Free Loans up to ₹100 Crore for MSMEs

On February 17, 2025, Finance Minister Nirmala Sitharaman unveiled the Mutual Credit Guarantee Scheme for Micro, Small, and Medium Enterprises (MSMEs) in Mumbai. This initiative, announced in the Union Budget 2025-26, aims to facilitate collateral-free loans up to ₹100 crore for MSMEs to purchase plant, machinery, or equipment. The scheme offers 60% guarantee coverage through the National Credit Guarantee Trustee Company Ltd (NCGTC) to member lending institutions, enhancing credit accessibility for MSMEs and bolstering the manufacturing sector in India.

During the launch event, the Finance Minister distributed sanction letters to the initial beneficiaries of the scheme. She also highlighted the government's commitment to supporting MSMEs through various measures, including the expansion of the SWAMIH (Special Window for Affordable and Mid-Income Housing) Fund, which has successfully delivered over 50,000 homes as of January 24, 2025. The proposed SWAMIH Fund 2 aims to expedite the completion of an additional 1 lakh housing units, further contributing to economic growth and development.