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Good news for MSME companies, government launched a new guarantee scheme of debt up to Rs 100 crore

MSME Sector

Photo: File MSME Sector

Government According to the announcement made in the budget of FY 2024-25, on Wednesday, a new loan guarantee scheme incorporating a loan of up to Rs 100 crore for the MSME sector has been launched. The Finance Ministry said in a statement that the purpose of Mutual Credit Guarantee Scheme (MSME) launched for Micro, Small and Medium Enterprises (MSME) to give a loan-facility of up to Rs 100 crore sanctioned to eligible entrepreneurs for the purchase of equipment. For ‘Member borrowing institutes’ (MLI), 60 percent guarantee coverage is to be given from National Credit Guarantee Trustee Company Limited (NCGTC).

These conditions have to be fulfilled

MSMEs have to fulfill certain conditions to avail this scheme. The borrower must 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 percent of the project cost. The ministry said that the annual guarantee fee on the loan during the acceptance year in the scheme will be zero. This fee will be 1.5 percent per year of the outstanding loans of the previous year for the next three years. After that the annual guarantee fee will be one percent annually of the outstanding total loan on 31 March last year. The scheme will be applicable to all the loans approved during the four-year period from the date of issuance of operational guidelines of the scheme under MCGS-MSME or till the issuance of a cumulative guarantee of Rs seven lakh crore.

MSME also has many expectations from this budget

On February 1, Parliament is going to present the FY 2025-26 general budget. MSME also has many expectations from this budget. This sector demands that he gets cheap financial assistance. The MSME sector wants him to get loans for long term at a rate of less than 10%. It also wants concessions in sector tax and is demanding to strengthen digital infrastructure.

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