Government Rolls Out New Push to Ease MSME Credit & Certification
NEW DELHI — September 18, 2025 — The Government of India today unveiled a comprehensive and aggressive new initiative aimed at revolutionizing the Micro, Small, and Medium Enterprises (MSME) sector. The program, titled "Udyam Saathi", is designed to dismantle bureaucratic hurdles, streamline access to credit, and simplify the certification process. With a budget of ₹50,000 crore allocated for the first phase, the initiative signals a major push to unlock the full potential of MSMEs, which are considered the backbone of the Indian economy.
Announcing the program in New Delhi, Union Minister for MSME, Shri Rakesh Singh, emphasized the government's commitment to empowering this vital sector. "For too long, our MSMEs have been bogged down by red tape and a lack of access to formal credit," he stated. "With Udyam Saathi, we are not just offering a helping hand; we are building a new ecosystem where every small business has the tools and the support it needs to thrive, innovate, and contribute to our nation's growth. This is about making India a global manufacturing powerhouse."
The initiative is a multi-pronged strategy, focusing on three key areas: credit access, certification and compliance, and technological integration.
Pillar 1: Reimagining Credit Access
The lack of timely and affordable credit is one of the most significant challenges for MSMEs. To address this, the Udyam Saathi program introduces several groundbreaking measures.
The "Udyam Fin-Tech" Platform
The cornerstone of the credit initiative is a new digital platform called Udyam Fin-Tech. This platform will serve as a single-window solution for all MSME credit needs, connecting businesses with a network of public and private banks, Non-Banking Financial Companies (NBFCs), and venture capital funds. The platform will use a sophisticated algorithm to match MSMEs with lenders based on their business profile, credit history, and funding requirements.
One of the most innovative features of this platform is the introduction of a "Digital Credit Score" for MSMEs. This score will not be based solely on traditional credit history but will also take into account other factors like GST filings, utility bill payments, and the company's social media presence. This will help even new businesses with no formal credit history to access funding. The platform will also have a "loan tracker" feature, allowing MSMEs to monitor the status of their applications in real-time, bringing unprecedented transparency to the process.
The "Credit Guarantee Fund Plus" Scheme
The government is also strengthening its existing credit guarantee schemes with the introduction of the Credit Guarantee Fund Plus (CGF+). Under this enhanced scheme, the government will provide a 100% guarantee on loans up to ₹5 crore for MSMEs, an increase from the previous limit of ₹2 crore. This move is aimed at instilling confidence in banks and encouraging them to lend more freely to the sector.
Furthermore, the CGF+ will include a special provision for women entrepreneurs and businesses in rural areas, offering a lower interest rate and a more flexible repayment schedule. This is a crucial step towards promoting inclusive growth and ensuring that the benefits of the program reach all corners of the country.
Pillar 2: Simplifying Certification & Compliance
For many MSMEs, the process of obtaining licenses and certifications is a maze of bureaucracy and paperwork. The Udyam Saathi initiative seeks to simplify this process through the following measures.
One-Click "Udyam Registration"
The existing Udyam Registration portal will be upgraded to a more user-friendly, single-click interface. Businesses will be able to register and obtain their Udyam Certificate in minutes, without the need for extensive documentation. The new portal will be integrated with the GST portal and the Income Tax Department's database, allowing for automatic data verification and reducing the need for manual inputs.
The government has also announced a new "Self-Certification" model for certain low-risk businesses. Under this model, MSMEs can self-certify their compliance with various regulations, with government agencies conducting random audits to ensure compliance. This will significantly reduce the time and cost associated with obtaining multiple licenses and permits.
The "Ease of Doing Business" Index for States
To encourage states to simplify their regulations, the government will launch a new "Ease of Doing Business for MSMEs" index. States will be ranked based on their performance in a number of key indicators, including the time taken to approve licenses, the availability of credit, and the effectiveness of their grievance redressal mechanisms. The top-performing states will be given additional funding and incentives, creating a healthy competition among states to attract and support MSMEs.
The index will be updated quarterly and will be made public, allowing businesses to make informed decisions about where to set up or expand their operations.
Pillar 3: Technological Integration & Skilling
The future of MSMEs is intrinsically linked to their ability to adapt to new technologies. The Udyam Saathi initiative includes a strong focus on digital transformation and skill development.
The "Digital MSME Hub"
The government will establish a "Digital MSME Hub" in every district. These hubs will provide training and support to MSMEs on a range of digital tools, including e-commerce platforms, digital marketing, and cybersecurity. The hubs will also offer free software licenses and cloud-based services to help businesses digitize their operations.
The program will also launch a new skilling initiative called "Saathi Skill-Up". This initiative will partner with vocational training centers and ITIs to provide short-term courses to MSME employees on new technologies. The courses will be subsidized by the government, making them accessible to even the smallest of businesses.
Promoting E-Commerce
The government is also taking steps to promote e-commerce among MSMEs. The Udyam Saathi program will include a special partnership with leading e-commerce companies to provide MSMEs with preferential access to their platforms. The government will also subsidize the cost of creating and maintaining online storefronts for MSMEs, encouraging them to expand their reach beyond local markets.
A new "Made in India" marketplace will also be launched, exclusively for MSMEs. This marketplace will feature high-quality products from Indian MSMEs, both for domestic and international buyers, helping to showcase the country's manufacturing capabilities on a global scale.
The Road Ahead: Challenges and Opportunities
While the Udyam Saathi program is ambitious and well-funded, it faces significant challenges. The most critical will be ensuring its effective implementation on the ground. The success of the program will depend on the cooperation of various government agencies, financial institutions, and state governments.
Another challenge will be to ensure that the benefits of the program reach the most marginalized and underserved communities, including women entrepreneurs and businesses in rural and remote areas. The government has stated that it will monitor the program's progress closely and will make adjustments as needed to ensure that it is inclusive and equitable.
Despite the challenges, the Udyam Saathi program presents a massive opportunity to transform the Indian economy. By empowering its MSMEs, the government is not just creating jobs and wealth; it is building a more resilient, dynamic, and self-reliant nation. The coming months will be a test of the program's effectiveness, but the launch of Udyam Saathi is a clear signal that the government is serious about its commitment to the MSME sector
0 Comments