Mutual Credit Guarantee Scheme: This scheme will strengthen the manufacturing sector and the ‘Make in India’ campaign will also get a new speed.
New Delhi:
The Central Government has approved the Mutual Credit Guarantee Scheme – MCGS -MSME for Manufacturing MSME. Under this scheme, the eligible MSME will be given a loan plant, machinery or equipment up to Rs 100 crore.
Guarantee coverage will get up to 60%
According to the Finance Ministry, the National Credit Guarantee Trustee Company Limited (NCGTC) will provide up to 60 percent guarantee coverage on loans up to Rs 100 crore to eligible MSMEs under this scheme. This guarantee will be given to those members loan institutes (MLI), who will give loans under this scheme.
Who can take advantage of this scheme?
- Borrowed firm should be a manufacturing MSME with MSME Registration.
- The maximum loan limit will be Rs 100 crore.
- The total cost of the project may exceed the amount fixed in the scheme, but the cost of equipment or machinery should be at least 75%.
Rule of Repayment and Moratorium
- The repayment period of loans up to Rs 50 crore will be up to 8 years.
- It will get a Moretorium period of up to 2 years (where the original installment of the loan is exempted).
- Long repayment periods for loans of over 50 crores can be considered and more Moretorium period.
How long will the scheme remain in force?
This scheme will continue till the period of four years is completed or a guarantee of Rs 7 lakh crore is released.
‘Make in India’ will get a boost
Manufacturing sector is 17% of the country’s GDP and more than 2.7 crore people work in it. This scheme will strengthen the manufacturing sector and the ‘Make in India’ campaign will also get a new speed.
The government believes that this initiative will increase the financial growth of the MSME sector and encourage investment in new technology and equipment.