News Arena

Home

Nation

States

International

Politics

Opinion

Economy

Sports

Entertainment

Trending:

Home
/

govt-approves-100-crore-loan-scheme-for-msmes

Economy

Govt approves ₹ 100 crore loan scheme for MSMEs

The scheme would provide 60 per cent 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, according to the Ministry of Finance.

News Arena Network - New Delhi - UPDATED: January 30, 2025, 04:46 PM - 2 min read

Centre approves scheme to boost MSME manufacturing sector. (Representational picture)


The government has approved the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME), which will facilitate loans of up to Rs 100 crore for the purchase of plant and machinery/equipment for eligible firms.

 

The scheme will provide 60 per cent guarantee coverage by the National Credit Guarantee Trustee Company Limited (NCGTC) to member lending institutions (MLIs) for credit facilities of up to Rs 100 crore, sanctioned to eligible MSMEs under MCGS-MSME for the purchase of equipment/machinery, according to the Ministry of Finance. 

 

According to the scheme, the borrower must be an MSME with a valid Udyam Registration Number. The loan amount guaranteed should not exceed Rs 100 crore, although the project cost could be higher. The minimum cost of equipment/machinery must account for 75 per cent of the project cost. 

 

"Loans of up to Rs 50 crore under the scheme will have a repayment period of up to 8 years, with a moratorium period of up to 2 years on principal instalments. For loans above Rs 50 crore, a higher repayment schedule and moratorium period on principal instalments may be considered," according to the scheme.

 

An upfront contribution of 5 per cent of the loan amount must be deposited at the time of the application for the guarantee cover, and the annual guarantee fee on the loan under the scheme will be zero during the year of sanction. Over the next three years, it will be 1.5 per cent per annum of the loan outstanding as of March 31 of the previous year. Thereafter, the annual guarantee fee will be 1 per cent per annum of the loan outstanding as of March 31 of the previous year. 

 

"The scheme will be applicable to all loans sanctioned under MCGS-MSME during the 4-year period from the date of issue of operational guidelines or until a cumulative guarantee of Rs 7 lakh crore is issued, whichever is earlier," according to the ministry. 

 

The manufacturing sector currently accounts for 17 per cent of the nation's GDP and employs over 27.3 million workers. 

"The MCGS-MSME scheme is expected to provide a major boost to manufacturing and, in turn, to 'Make in India,'" said the ministry.

TOP CATEGORIES

  • Nation

QUICK LINKS

About us Rss FeedSitemapPrivacy PolicyTerms & Condition
logo

2025 News Arena India Pvt Ltd | All rights reserved | The Ideaz Factory