New Delhi [India], August 10 : The government's existing credit and guarantee schemes are expected to continue supporting financing access for micro, small and medium enterprises (MSMEs) and traditional artisans in Uttar Pradesh, with measures aimed at reducing collateral requirements, expanding working capital availability and strengthening the competitiveness of handicraft businesses. The government has said these initiatives cover handicraft industries in western Uttar Pradesh, including traditional sectors such as brass, horn and other handicrafts.
In a written reply to a Lok Sabha question on Monday, the Finance Ministry noted that the government has already undertaken various initiatives to improve credit flow to MSMEs across the country, including handicraft industries in western Uttar Pradesh.
One of the key programmes is the Pradhan Mantri Mudra Yojana (PMMY), which currently provides collateral-free credit of up to Rs 20 lakh to eligible micro enterprises. In Uttar Pradesh, 6.02 crore loans amounting to Rs 4.13 lakh crore have been extended under the scheme since its inception, as of June 26, 2026. Women beneficiaries accounted for Rs 1.48 lakh crore, or 36 per cent, of the disbursements.
The government also highlighted the PM Vishwakarma Scheme, which provides end-to-end support, including collateral-free credit, to artisans and craftspeople engaged in 18 identified trades. The scheme offers enterprise development loans of up to Rs 3 lakh in two tranches at a concessional interest rate of 5 per cent, with an 8 per cent interest subvention from the government.
In Uttar Pradesh, Rs 129 crore has been disbursed to 15,304 beneficiaries under PM Vishwakarma.
For the broader handicrafts sector, the Ministry of Textiles is implementing the National Handicrafts Development Programme (NHDP) and Comprehensive Handicrafts Cluster Development Scheme (CHCDS). These programmes provide support for skill development, cluster development, infrastructure, technology, digitisation, branding and marketing.
During FY2025-26, Rs 29.12 crore was sanctioned under NHDP, benefiting 10,616 artisans in Uttar Pradesh, while Rs 6.25 crore was sanctioned under CHCDS, benefiting 1,510 artisans.
The Credit Guarantee Scheme for Micro and Small Enterprises has also facilitated collateral-free credit, with more than 21 lakh guarantees worth Rs 1.58 lakh crore issued in Uttar Pradesh as of July 31, 2026.
Meanwhile, ECLGS 5.0, launched in May 2026, provides eligible MSMEs additional credit of up to 20 per cent of peak fund-based working capital outstanding in Q4 FY2025-26. In Uttar Pradesh, Rs 13,139 crore had been disbursed to 55,824 MSMEs as of August 5, 2026.