The Micro Small and Medium Enterprises (MSME) Ministry is seeking over 4-fold increase in Credit Guarantee Fund Scheme to Rs 10,750 crore during the 12th Plan period. This is being done with a view of increasing coverage of the fund by providing collateral-free loans to increasing number of micro and small units.
In a bid to boost the MSME sector, which contributes 45% to overall the manufacturing output and 40% towards exports of the country, government had introduced the aforementioned scheme. The government has also granted a provision of Rs 2,500 crore during the 11th Plan which was operated by the MSME Ministry.
As much as 95% of the MSME sector falls in the “unorganized” category which makes banks and other financial institutions difficult to provide aid. Yet the sector generates substantial employment opportunities and is the second largest employer of human resources after agriculture. However, the progress of the sector over the years has been applauding as most of the entrepreneurs start their business from a small unit which provides them freedom to experiment their skills and talents, also innovate and transform their ideas which eventually nurtures it into a larger unit.