PR No – 50
20th January, 2025
New Delhi
MOS Finance lauds PHDCCI suggestions to improve lending for MSMEs: Promises to look into steps like collateral free loans up to Rs 5 crore and help desk for small units
While addressing the gathering Hon,ble Minister appreciated PHDCCI suggestions like collateral free loan to MSME upto 5 cr, and help desk for people seeking loans and registered MSMEs to be taxed at a flat 25% rate.
He also highlighted that the government’s focus is on “Sabka Saath, Sabka Vikas, Sabka Prayas,” which emphasises the need for growth in every sector of the economy, aligning with the vision of Viksit Bharat @2047 of our Hon’ble Prime Minister. Hon’ble Prime Minister has prioritized infrastructure development, increasing spending from ₹5 lakh crore to ₹11.11 lakh crore said Shri Pankaj Chaudhary, Hon’ble Minister of State, Ministry of Finance, Government of India at Conference on MSME Financing: A Key Driver for Viksit Bharat@ 2047 & PHDCCI’s 1 st MSME Banking & NBFC Excellence Sammaan – 2025 held today at PHD House, New Delhi.
Further, through SHGs, significant efforts have been made to empower women, he added. Under the Mudra Yojana, more than 31 lakh loans have been disbursed, with over 60% of the beneficiaries being women. Furthermore, 55 crore Jan Dhan accounts have been opened, of which 55% belong to women
The Minister further congratulated PHDCCI on completing 120 years and acknowledged its role in providing a shared platform to strengthen the backbone of our economy, which are MSMEs.
To make industries more efficient, the government has abolished 1,500 unnecessary laws and initiated steps to promote MSMEs. Over the last 10 years, there has been a noticeable change in the government’s approach toward industries; the cost and time for businesses have reduced significantly. In conclusion, the Hon’ble Minister emphasized that achieving the goal of making India a developed nation by 2047 will require a significant contribution from the MSME sector.
Dr. Ishita Ganguli Tripathy, Additional Development Commissioner, Ministry of MSME, Government of India informed that 5.86 cr enterprises have registered on the udyam portal till now which drives Employment of 24.8 cr.
She added, the formalised identity enables enterprise to avail the benefits, the focus is on upward mobility, in 2022 we brought out notification that previous category and benefits can continue after 3 yrs, more than 5 lakh enterprises have grown in this.
EODB is also prioritized, as Udyam registration does not require the uploading of any documents. Also, inclusive growth is being promoted by reaching out to rural and traditional artisans. Efforts are also being made to support Informal Micro Enterprises (IMEs) and collaborate with states through programs like RAMP and Vishwakarma, which serve as prime examples of this approach. There are several outreach programs to help enterprises become aware of the opportunities available to them. A network of technology centers and access-to-market programs are also being emphasized. She informed that under the Credit Guarantee Scheme for MSEs, women-owned enterprises have seen a 90% increase in credit guarantees. From 2000 to December 31, 2024, approximately 1.01 crore guarantees have been approved. She further mentioned that under the Self-Reliant India Fund, equity funding support has been provided to MSMEs. A total of 59 Daughter Funds have been empaneled, 533 MSMEs have been assisted, approximately ₹9,999 crore has been invested in MSMEs, and the average investment has been around ₹19 crore.
Mr. Shachindra Nath, Chair, BFSI Committee, PHDCCI & Founder and Managing Director, UGRO Capital discussed that unsecured loans are critical for MSMEs in India, as many of these businesses, particularly first-generation enterprises, lack access to adequate collateral.
There is around 90lakh crore MSME gap today, to ensure that MSMEs continue to thrive as a key driver of our economy, he proposed the following recommendations. First, MSME financing should be differentiated within regulatory frameworks- the Reserve Bank of India (RBI) should create a specialized framework for unsecured loans to MSMEs, balancing risk mitigation with the sector’s developmental needs. Second, co-lending models should be expanded by encouraging partnerships between banks, NBFCs, and fintech companies to deliver customized credit solutions at scale. Further, the utilization of Udyam Aadhaar should be enhanced by building digital tools that integrate Udyam Aadhaar data with credit platforms, enabling faster and data-driven credit assessments. Furthermore, the priority sector lending (PSL) target for MSMEs should be increased to 15%, ensuring greater focus on channeling affordable credit to this critical sector. Lastly, support for MSME-focused NBFCs should be strengthened by excluding them from bank exposure limits and risk weight tightening, thereby ensuring consistent liquidity flows.
Dr. Ranjeet Mehta, CEO & Secretary General, PHDCCI deliberated that there are three critical challenges for MSMEs- financing, market access, and access to technology. However, when the financial challenge is resolved to a great extent, the others can be easily sorted out. Another Key issue I would like to address is the scheme of collateral free loan to MSME upto 5 cr but in practical most of banks ask for collateral security for giving loan, here PHDCCI suggest if there can be a help desk for people seeking loans it can be sorted out.
Secondly, the corporate tax rate is around 25%, but MSMEs, especially proprietorships and LLP firms, are taxed at 33%. We request that registered MSMEs be taxed at a flat 25% rate. Lastly, he emphasized on Priority Sector Classification for credit to MSMEs through NBFCs.
PHDCCI’s presented 1st MSME Banking & NBFC Excellence Sammaan – 2025 to Banks, NBFCs and Fintech for their outstanding contribution to the MSME sector and their dedication in fostering financial inclusion and innovation in MSME financing.
The following were recognized:
- BestBank in MSME lending- State Bank of India
- Bestlarge NBFC in MSME lending- Tata Capital Financial Services Limited
- BestMedium NBFC in MSME lending- Northern Arc Capital Limited
- Bestupcoming NBFC in MSME lending- Aye Finance Private Limited
- BestFin-tech in MSME lending- Invoicemart
- Best NBFC in MSME Co-lending– U GRO Capital Limited
- Best SME Media Coverage- Money9
Vote of thanks was given by Mr. Jyoti Prakash Gadia, Co-Chair, BFSI Committee, PHDCCI & Managing Director, Resurgent India.
The event partners were UGRO Capital Ltd., SBM Bank (India), Falcon , SMC Finance, State Bank of India, Resurgent India, Getvantage & Progcap along with PHDCCI annual sponsors, DLF Ltd; Jindal Steel & Power; KLJ Group; Multani Pharmaceuticals Ltd; Marble City; MMG Group; Radico Khaitan Ltd; Uflex Ltd; Vestige; Eazy ERP Technologies; JK Tyre & Industries Ltd; Sagar Group of Industries; Superior Industries Limited; Samsung India Electronics; Oswal Greentech; Apeejay Stya Group; Blossom Kochhar Beauty Products Pvt Ltd; DCM Shriram; R E Rogers; Trident Group; Ajit Industries Pvt Ltd; Bhagwati Plastic and Pipes Industries; Central Coalfields Ltd; DD Pharmaceutical Ltd.; Hindware Sanitary; Jindal Steel; Modern Automobiles; P S BEDI & Co.
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Warm Regards,
Media Division, PHDCCI