- विज्ञापन -
New Delhi: The government has greenlit the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME), aimed at facilitating loans of up to Rs 100 crore for eligible firms to acquire machinery and equipment.
Under this scheme, the National Credit Guarantee Trustee Company Limited (NCGTC) will provide a 60% guarantee coverage to member lending institutions (MLIs) for loans up to Rs 100 crore, which can be used by eligible MSMEs for purchasing machinery and equipment, as stated by the Ministry of Finance.
To qualify for the scheme, borrowers must be registered MSMEs with a valid Udyam Registration Number. The guaranteed loan amount cannot exceed Rs 100 crore, although project costs may be higher, with at least 75% of the project cost allocated for equipment and machinery.
Loans up to Rs 50 crore will have a repayment period of up to 8 years, including a moratorium of up to 2 years on principal repayments. For loans exceeding Rs 50 crore, a longer repayment schedule and moratorium can be arranged.
An initial contribution of 5% of the loan amount is required at the time of applying for the guarantee cover, and the annual guarantee fee will be waived during the year of sanction. In the subsequent three years, the fee will be 1.5% per annum of the outstanding loan amount as of March 31 of the previous year, dropping to 1% per annum afterward.
This scheme will be applicable to all loans sanctioned under MCGS-MSME for four years from the issuance of operational guidelines or until cumulative guarantees of Rs 7 lakh crore are issued, whichever comes first.
Currently, the manufacturing sector accounts for 17% of India’s GDP and employs over 27.3 million workers. The MCGS-MSME scheme is anticipated to significantly enhance manufacturing and support the ‘Make in India’ initiative, according to the ministry.
