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Below the quote on Budget 2024-25 by Sanjay Agarwal, Senior Director, CareEdge Ratings

“Availability of GST data, account aggregators have enabled financiers to lend proactively to MSMEs. Bank credit to Industrial MSMEs has grown by over 13% CAGR in the last two years. Additionally, there has been a significant improvement in overall delinquencies from over 12% in FY17 to 2.3% in Q2FY24. MSMEs have an estimated credit gap of approximately Rs 28 lakh crore. Banks account for a significant share of MSME lending. Hence the introduction of schemes such as credit guarantee schemes for MSMEs in manufacturing, enhancement in the limit of MUDRA loans to Rs 20 lakh, reducing the turnover criteria for buyers on the TReDs platform would enable MSMEs access funds for capital expenditure / working capital. Further plans to introduce a scheme for enabling stressed MSMEs access bank finance and enabling public sector banks in creating in-house, technology-driven underwriting skills utilising MSMEs digital footprint and bring them in the formal credit system is a positive step”.

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