Good news for MSME companies, government launched a new loan guarantee scheme for up to Rs 100 crore
The government has launched a new credit guarantee scheme for the MSME sector covering loans up to Rs 100 crore in line with the announcement made in the Budget for the financial year 2024-25. The Mutual Credit Guarantee Scheme (MCGY-MSME) for Micro, Small and Medium Enterprises (MSME) aims to provide 60 per cent guarantee coverage from the National Credit Guarantee Trustee Company Limited (NCGTC) to ‘member lending institutions’ (MLIs) for sanctioning credit facilities up to Rs 100 crore to eligible enterprises for purchase of equipment, the Finance Ministry said in a statement.
These conditions have to be fulfilled
To avail this scheme, MSMEs have to fulfill some conditions. The borrower should be an MSME with a valid enterprise registration number. The guaranteed loan amount should not exceed Rs 100 crore and the minimum cost of equipment should be 75 per cent of the project cost. The ministry said that the annual guarantee fee on the loan during the sanction year in this scheme will be zero. This fee will be 1.5 per cent per annum of the outstanding loan of the previous year for the next three years. Thereafter, the annual guarantee fee will be one per cent per annum of the total loan outstanding as on March 31 of the previous year. This scheme will be applicable to all loans sanctioned under MCGS-MSME during a period of four years from the date of issue of operational guidelines of the scheme or till the cumulative guarantee of Rs seven lakh crore is issued, whichever is earlier.
MSMEs have many expectations from this budget too
The general budget for the financial year 2025-26 is going to be presented in Parliament on February 1. MSMEs have many expectations from this budget. This sector demands that it should get cheap financial assistance. The MSME sector wants to get long term loans at a rate of less than 10%. This sector also wants concessions in taxes and is demanding to strengthen the digital infrastructure.
