Evaluation of the Efficiency of Indian Credit Guarantee Scheme for MSMEs

The Micro, Small & Medium Enterprises (MSMEs) contribute significantly to the process of economic progress and growth. The MSMEs are stimulators of domestic demand through the process of employment creation, giving shape to ideas and innovation and fostering competition. In India, with over 30 million enterprises providing employment opportunities to over 70 million population, the MSME sector contributes greatly 45% of the total manufacturing sector output and over 40% of exports. The MSME sector produces over 6000 products. This sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth.