MUTUAL CREDIT GUARANTEE SCHEME FOR MSMEs (MCGS-MSME) for Collateral Free Loans upto INR 100 Crores approved by Govt.

Government Scheme, Indian and Global Economy, Taxation and Statutary Compaliances News, Uncategorized

The aim of the scheme is to strengthen MSME manufacturing sector .

Government of India (GoI) has approved introduction of Mutual Credit Guarantee Scheme for MSMEs (MCGS- MSME) for providing 60% 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.

SALIENT FEATURES OF THE SCHEME:

● Borrower should be an MSME with valid Udyam Registration Number

● Loan amount guaranteed shall not exceed Rs.100 crore

● Project Cost could be of higher amounts also

● Minimum cost of equipment / machinery is 75% of project cost

● Loan upto Rs.50 crore under the Scheme shall have repayment period of upto 8 years with upto 2 years moratorium period on principal instalments.
For loans above Rs.50 crore, higher repayment schedule and moratorium period on principal instalments can be considered.

● Upfront (initial) contribution of 5% of the loan amount shall be deposited at the time of application of guarantee cover

● Annual Guarantee Fee on loan under the Scheme shall be Nil during the year of sanction. During the next 3 years, it shall be 1.5% p.a. of loan outstanding as on March 31 of previous year. Thereafter, Annual Guarantee Fee shall be 1% p.a. of loan outstanding as on March 31 of previous year.

■ The Scheme will be applicable to all loans sanctioned under MCGS-MSME during the period of 4 years from the date of issue of operational guidelines of the scheme or till cumulative guarantee of Rs. 7 lakh crore are issued, whichever is earlier.

■ The scheme will facilitate collateral free loans by banks and financial institutions to MSMEs who are in need of debt capital for their expansion and growth.

■ MLIs – All Scheduled Commercial Banks (SCBs), Non-Banking Financial Companies (NBFCs) and All India Financial institutions (AIFIs), who register with NCGTC under the Scheme.

Sudheendra Kumar ( Mobile /WhatsApp: 91-9820088394)

Team- Intellex Strategic Consulting Private Limited

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