Now, Collateral-Free Loans Up To Rs 100 Cr For MSMEs

The govt’s focus has not shifted from capital expenditure to consumption expenditure - Nirmala Sitharaman, FM

Mumbai: The Centre on Monday launched the ‘Mutual Credit Guarantee Scheme for MSMEs’, which was announced in the Union Budget 2024-25 to boost the micro, small, and medium enterprises (MSMEs). The scheme facilitates collateral-free loans to MSMEs by providing loans up to Rs100 crore for the purchase of plant, machinery, or equipment.

The scheme would provide 60 per cent guarantee coverage by the National Credit Guarantee Trustee Company Ltd (NCGTC) to member lending institutions (MLIs) for a credit facility up to Rs100 crore, sanctioned to eligible MSMEs under MCGS-MSME for the purchase of equipment/machinery.

Launching the scheme here, Union Finance Minister Nirmala Sitharaman also distributed sanction letters to MSMEs eligible under the scheme in Mumbai.The scheme is expected to facilitate easy availability of credit for MSMEs and give a major boost to the manufacturing sector in India.

According to the scheme, the borrower should be an MSME with a valid Udyam Registration Number, the loan amount guaranteed should not exceed Rs100 crore, the project cost could be of higher amounts also and the minimum cost of equipment /machinery is 75 per cent of the project cost.

FM Sitharaman and Minister of State (MoS) for Finance Pankaj Chaudhary also handed over the keys to homebuyers who have benefitted due to the SWAMIH Fund during the post-Budget interaction programme with stakeholders here.