Only 140 exporters have registered for collateral-free export credit under the Export Promotion Mechanism (EPM) since January, highlighting weak uptake of the MSME-focused guarantee scheme. According to an official document reviewed by Business Standard, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has facilitated the generation of only 159 Udyam Registration Numbers (UINs) in the last six months. A UIN is a 16-digit code mandatory for eligible enterprises to secure collateral-free loans, with banks using the UIN to validate business details and apply for guarantee coverage on the CGTMSE portal.
Under the collateral-free export credit scheme, micro and small enterprises can avail of export credit of up to ₹10 crore with guarantee coverage of 85 per cent, while medium enterprises are eligible for the same loan amount with guarantee coverage of 65 per cent. As reported by Business Standard, the muted response to the credit guarantee scheme contrasts with the much stronger traction seen under the interest subvention scheme for pre- and post-shipment credit, another intervention under the flagship EPM. Since its rollout in January, 8,459 exporters have registered to avail of interest subvention of 2.75 per cent on loans of up to ₹50 lakh per exporter annually. Exim Bank, which administers the subvention scheme, has facilitated the generation of over 20,000 UINs in the last six months, demonstrating significantly higher adoption rates.
According to experts cited by Business Standard, lack of awareness and cumbersome paperwork are likely reasons for the slow uptake of the collateral support scheme. Ashok Saigal, former chairman of the Confederation of Indian Industry's National MSME Council, noted that MSMEs are generally less aware of government schemes than larger companies and require greater hand-holding in completing necessary documentation. The slow uptake of the collateral support scheme figured in discussions at the Board of Trade meeting chaired by Commerce and Industry Minister Piyush Goyal last week, which saw participation from central and state government officials, industry associations, and export promotion councils from all over the nation.
At the Board of Trade meeting, the Directorate General of Foreign Trade (DGFT) asked state governments to adopt a more proactive role in promoting the intervention. As reported by Business Standard, the DGFT urged state government officials to engage with the State Level Bankers' Committee and member lending institutions to improve utilisation of the scheme. The Department of Commerce also suggested that state officials conduct sensitisation sessions through District Industries Centres and MSME District Facilitation Offices to raise awareness among eligible exporters. Emails sent to the Ministry of Commerce and the Ministry of Finance remained unanswered till press time.
Both the collateral support and interest subvention schemes have been launched under Niryat Protsahan, the financial assistance pillar of the EPM. According to Business Standard, the government has earmarked ₹1,440 crore for Niryat Protsahan in the current financial year out of the total six-year outlay of ₹10,401 crore. The EPM's other pillar, Niryat Disha, focuses on making India's export products market-ready and globally competitive, with Finance Minister Nirmala Sitharaman having announced the EPM in the FY26 Budget with a total outlay of ₹25,060 crore for the six years ending FY31.
