FM Calls For Reforms To Empower MSMEs, Collateral-Free Loans, Sets ₹7 Lk Cr Lending Target By FY27

At the 11th SBI Banking & Economics Conclave 2024 in Mumbai, themed "Making Aspirations of Viksit Bharat a Reality," Finance Minister Nirmala Sitharaman highlighted the crucial role of banks in strengthening the MSME sector. She emphasised the need for banking reforms to enhance lending capabilities, including offering collateral-free loans, to empower MSMEs—a key driver of job creation in India. FM Sitharaman announced ambitious lending targets for banks, urging them to disburse ₹6.12 lakh crore to MSMEs by FY26 and ₹7 lakh crore by FY27. She also highlighted her recent directive to Scheduled Commercial Banks and NBFCs to go beyond the usual lending estimate of ₹4.21 lakh crore for FY25, aiming for an additional ₹1.54 lakh crore in this financial year. Recognising MSMEs as not just an economic sector but a transformative job-creating force, she proposed cash flow-based lending as a game-changer for improving financial access and inclusion. These reforms aim to foster growth, expand credit accessibility, and strengthen India’s journey towards becoming a developed economy.