"We are strengthening the MSE ecosystem by enhancing access to collateral-free credit and reducing the credit risk for lenders"

How you feel about this year’s Budget announcements as the head of the CGTMSE? Do you think the finance minister has done justice with your demands/ expectations?

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The Government has been consistently committed to strengthening credit access for MSMEs, and the recent Budget announcements are a testament to that. One of the most notable decisions—doubling the credit guarantee cover from ₹5 crore to ₹10 crore—is a significant step forward. This move is expected to unlock an additional ₹1.5 lakh crore in credit over the next five years, which will enable us to expand our outreach substantially. It is a welcome development that aligns well with our mission of empowering micro and small enterprises and supporting inclusive economic growth. Besides, the Budget announcements in respect of revised definition of MSMEs, enhancement in guarantee covers for exporters and startups are other major announcements which are expected to give a major boost the MSMEs.

To start with, please let our readers know how CGTMSE evolved over time.

Since its inception in 2000, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has continuously evolved to enhance financial inclusion and strengthen support for underserved segments, particularly women entrepreneurs.

I will take you through the chronology of events because that will give you how the process was gradually evolved.

Early Enhancements (2003-2009): Initial changes focused on improving accessibility and affordability, including increased credit coverage for women borrowers (from 70 per cent to 80 per cent) and the introduction of pro-rata and differential fee structures. In 2007, guarantee coverage for women was further enhanced up to 85 per cent for loans below ₹5 lakh. By 2009, annual guarantee fees were reduced significantly for women.