Union Budget 2024: Upper limit for Mudra scheme loans DOUBLED; credit support for MSMEs

Union Budget 2024: The Budget 2024 doubles the Mudra loan limit to ₹20 lakh for MSMEs. New mechanisms for credit continuity during stress periods are introduced, and SIDBI will open 24 new branches to support MSMEs

The Finance Minister, Nirmala Sitharaman, announced during the Budget 2024 presentation that the upper limit of loans available under the Mudra scheme has been doubled. This enhancement aims to support Micro, Small, and Medium Enterprises (MSMEs) by increasing the loan limit from ₹10 lakh to ₹20 lakh. The Mudra scheme, established in 2015, was originally designed to provide financial assistance to small and micro enterprises through commercial banks, small finance banks, and non-banking financial corporations.

In addition to the increased loan limit, the Finance Minister introduced a new mechanism to ensure the continuity of bank credit to MSMEs during their periods of financial stress. This measure is intended to bolster the resilience and growth of the start-up ecosystem in India.

Over the last financial year, the government has sanctioned Mudra loans amounting to ₹5.4 lakh crore, demonstrating significant support for small businesses. Furthermore, the Small Industries Development Bank of India (SIDBI) plans to expand its reach by opening 24 new branches in the current financial year, with a goal of serving more MSMEs over the next three years.

These initiatives reflect the government’s commitment to strengthening the MSME sector, which plays a crucial role in the economic development of the country.