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Just like any business, micro, small, and medium enterprises (MSMEs) need funding to go about their daily operations. Over the years the government has brought big changes to cater to the wants and needs of MSMEs with schemes and guarantees like the emergency credit line guarantee scheme (ECLGS), which has delivered credit to more than 130 lakh MSMEs and the credit guarantee trust for micro and small enterprises (CGTMSE), which provides an additional Rs 2 lakh crore additional credit for micro and small enterprises specifically.
Notably, many banks have also begun offering loans of various kinds specifically catered to MSMEs. However, an interesting shift has been noticed in the world of MSME financing – more and more MSMEs have been shifting from banks as their primary lender to non-banking finance companies (NBFCs).
