Govt Approves Mutual Credit Guarantee Scheme MSME Manufacturing Sector; Credit Facility Upto Rs 100 Crore
The Scheme will be applicable to all loans sanctioned under MCGS-MSME during the period of 4 years from the date of issue of operational guidelines of the scheme or till cumulative guarantee of Rs. 7 lakh crore are issued, whichever is earlier.
Trending Photos
)
New Delhi: The central government has approved Mutual Credit Guarantee Scheme to strengthen MSME Manufacturing Sector, fulfilling the budget announcement of 2024-25.
"GoI has approved introduction of Mutual Credit Guarantee Scheme for MSMEs (MCGS- MSME) for providing 60% guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs) for credit facility upto Rs.100 crore sanctioned to eligible MSMEs under MCGS-MSME for purchase of equipment / machinery," said a finance ministry release.
MLIs are all Scheduled Commercial Banks (SCBs), Non-Banking Financial Companies (NBFCs) and All India Financial institutions (AIFIs), who register with NCGTC under the Scheme.
Salient Features of The Mutual Credit Guarantee Scheme
Borrower should be an MSME with valid Udyam Registration Number;
Loan amount guaranteed shall not exceed Rs.100 crore
Project Cost could be of higher amounts also
Minimum cost of equipment /machinery is 75% of project cost
Loan upto Rs.50 crore under the Scheme shall have repayment period of upto 8 years with upto 2 years moratorium period on principal instalments. For loans above Rs.50 crore, higher repayment schedule and moratorium period on principal instalments can be considered.
Upfront (initial) contribution of 5% of the loan amount shall be deposited at the time of application of guarantee cover
Annual Guarantee Fee on loan under the Scheme shall be Nil during the year of sanction. During the next 3 years, it shall be 1.5% p.a. of loan outstanding as on March 31 of previous year. Thereafter, Annual Guarantee Fee shall be 1% p.a. of loan outstanding as on March 31 of previous year
The Scheme will be applicable to all loans sanctioned under MCGS-MSME during the period of 4 years from the date of issue of operational guidelines of the scheme or till cumulative guarantee of Rs. 7 lakh crore are issued, whichever is earlier.
Manufacturing sector currently comprises 17% of the nation’s GDP and over 27.3 million workers. Hon’ble Prime Minister’s has given a call for ‘Make in India, Make for the World’ and has signalled that India is ready and keen to increase the share of manufacturing to 25% of GDP. The Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) is expected to facilitate the availability of credit for purchase of Plant and Machinery / Equipment by MSMEs and give a major boost to manufacturing and thereby to Make in India.
With availability of credit to expand the installed capacity of manufacturing units, it can be expected that the manufacturing will grow at a faster pace, said the finance ministry release.
"Also, the need for a credit guarantee scheme for the manufacturing units, particularly for the enterprises in the medium category has been raised by industry associations from time to time. So, to give a boost to manufacturing by facilitating the availability of credit for purchase of Plant and Machinery / Equipment, ‘Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) is being introduced. The scheme will facilitate collateral free loans by banks and financial institutions to MSMEs who are in need of debt capital for their expansion and growth," it added.
Stay informed on all the latest news, real-time breaking news updates, and follow all the important headlines in india news and world News on Zee News.
Live Tv