New SME Growth Fund Targets Tier‑2, Tier‑3 Cities with Massive Capital Push

New Delhi, October 7 – The Government of India will create a dedicated SME Growth Fund of INR 10,000 crore, designed to make capital more reachable for small‑scale enterprises and to strengthen trust among financiers.

Ranjit Mehta of PHDCCCI called the measure a “big step” by the Prime Minister, noting that direct equity participation will solve the most pressing problem for small firms – obtaining easy funding.

He also emphasized that the government plans to support MSME listings through IPOs, giving aspiring companies a market platform for growth.

According to Satis Nagraj, Vice‑President of the Karnataka Chamber, SEBI‑approved banks will channel the fund, and leveraging it threefold will generate an effective pool of about INR 40,000 crore. The initiative specifically targets businesses operating in Tier‑2 and Tier‑3 urban centers, areas previously underserved by private lenders.

The Central Cabinet gave its nod to the scheme on Tuesday, positioning it within the broader 2026‑27 budget framework that seeks to deliver equity, liquidity and professional assistance across the MSME landscape, especially in manufacturing, services, technology and innovation‑driven value chains.