This document summarizes the Indian government's credit-linked schemes for Micro, Small, and Medium Enterprises (MSMEs) as of August 21, 2025. The Ministry of Micro, Small and Medium Enterprises implements the Credit Guarantee Scheme (CGS) through the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE), offering guarantee coverage for loans up to ₹10 crore extended by Member Lending Institutions to Micro and Small Enterprises (MSEs) without collateral security or third-party guarantees. This ceiling was extended from ₹5 crore effective April 1, 2025. Additional credit-linked support is provided through schemes such as the Prime Minister's Employment Generation Programme (PMEGP) and the Special Credit Linked Capital Subsidy Scheme (SCLCSS) under the National SC/ST Hub (NSSH). The Emergency Credit Line Guarantee Scheme (ECLGS) provided collateral-free loans with 100% guarantee to existing eligible borrowers. A State Bank of India research report (dated January 23, 2023) indicated that the ECLGS saved approximately 14.6 lakh MSME accounts, with roughly 93.8% falling under the MSE category.
Key Entities Referenced
Ministry of Micro, Small and Medium Enterprises: The Indian government ministry responsible for formulating policies and programs to promote the growth and development of micro, small and medium enterprises.
Emergency Credit Line Guarantee Scheme (ECLGS): A scheme providing collateral-free loans to existing eligible borrowers, with a 100% guarantee in respect of the eligible amount as per the scheme guidelines, aimed at supporting MSMEs.
Credit Guarantee Scheme (CGS): A scheme implemented by the Ministry of Micro, Small and Medium Enterprises through Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) to provide guarantee coverage for loans to MSEs.
Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE): An organization that provides guarantee coverage to Member Lending Institutions for loans extended to Micro and Small Enterprises (MSEs).
Micro and Small Enterprises (MSEs): Small scale industries that are covered under the Credit Guarantee Scheme.
Prime Minister's Employment Generation Programme (PMEGP): A credit-linked subsidy program implemented by the Ministry of MSME to generate employment opportunities.
Special Credit Linked Capital Subsidy Scheme (SCLCSS): A scheme under National SCST Hub (NSSH) implemented by the Ministry of MSME to provide credit linked support.
National SCST Hub (NSSH): An initiative to support entrepreneurs from the Scheduled Castes (SC) and Scheduled Tribes (ST) communities.
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION NO. 4654
TO BE ANSWERED ON: 21.08.2025
CREDIT-LINKED SCHEMES FOR SMALL ENTERPRISES
4654. DR. MALLU RAVI:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) whether the Government has launched any updated credit-linked schemes for small
enterprises after April 2025 ; and
(b) the impact of the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) on
the survival and growth of Micro, Small and Medium Enterprises (MSMEs)?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a): The Ministry of Micro, Small and Medium Enterprises implements Credit Guarantee
Scheme (CGS) through Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE),
in which guarantee coverage for loans extended by Member Lending Institutions to Micro and
Small Enterprises (MSEs), without requiring collateral security or third-party guarantees is
provided. Effective from 01.04.2025, the ceiling for guarantee coverage has been extended from Rs.
5 crore to Rs. 10 crore.
To provide credit linked support, schemes like Prime Minister's Employment Generation
Programme (PMEGP) and Special Credit Linked Capital Subsidy Scheme (SCLCSS) under
National SC-ST Hub (NSSH) are implemented by the Ministry of MSME.
(b): Emergency Credit Line Guarantee Scheme (ECLGS) provided for collateral free loans to
existing eligible borrowers with 100% guarantee in respect of the eligible amount as per the Scheme
guidelines. As per the State Bank of India’s research report dated 23.01.2023 on ECLGS, almost
14.6 lakh MSME accounts, of which about 93.8% of the accounts were in MSE categories, were
saved.
*****