Budget 2024: Government increases Mudra Loan Limit to Rs 20 Lakh

Prameyanews English

Published By : Pradeep Subudhi | July 23, 2024 12:31 PM

As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.

New Delhi, July 23: As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh. Union Finance Minister Nirmala Sitharaman announced that the Mudra loan limit will be raised from the current Rs 10 lakh to Rs 20 lakh for those who have repaid previous loans under the Tarun category.

 

Additionally, Sitharaman revealed plans to introduce a credit guarantee scheme for MSMEs in the manufacturing sector. This scheme includes a new mechanism to ensure the continuation of bank credit to MSMEs during "stressed periods" through a government-promoted fund.

 

"The new credit assessment model will be based on the scoring of digital footprints of MSMEs in the economy," Sitharaman said, highlighting that this approach will mark a "significant improvement" over traditional credit assessments, which rely solely on asset or turnover criteria. This model will also extend to MSMEs without a formal accounting system.

 

The Finance Minister emphasized the introduction of a new mechanism to facilitate the continuation of bank credit to MSMEs during their stress periods while being in the special mention account (SMA) stage. She explained that MSMEs, when in the SMA stage for reasons beyond their control, need credit to sustain their operations and avoid slipping into the NPA (Non-Performing Asset) stage.

 

According to CRISIL, the MSME sector in India faces a substantial funding shortfall estimated at Rs 20-25 lakh crore. Currently, banks account for 75% of lending to this segment. To address this, public sector banks are encouraged to establish in-house, technology-driven underwriting capacities to serve new borrowers and integrate them into the formal credit system.
 

 

 

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As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.
As part of the Union Budget, the government has increased the limit for Mudra loans to Rs 20 lakh.

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