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Govt notifies Rs 3 lakh crore MSME credit guarantee scheme

Posted Date : 28-May-2020 , 08:49:46 am | Posted By CASANSAAR print Print
The government on May 26 notified the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme for Medium, Small and Micro Enterprises (MSMEs) under the Atma Nirbhar Bharat Abhiyan to help them tide over the economic distress being faced due to the COVID-19 pandemic.

Under this scheme, MSMEs borrowers with up to Rs 25 crores of total borrowing can avail an additional 20 percent of the loan outstanding from banks, NBFCs, and other financial institutions (FI). This incremental lending by banks and financial institutions of up to Rs 3 lakh crore in total will be 100 percent guaranteed by the Government of India.

Borrowers will have a one-year moratorium of repayment, and the interest rate charged by banks/FIs will be capped 9.25 percent, and at 14 percent in the case of NBFCs. The scheme is also aimed at helping stressed borrowers who are not in default, therefore borrowers with standard accounts (with timely repayment), SMA-0 (with overdue of up to 30 days) and SMA-1 (with overdubs of up to 60 days) are eligible to take these loans.

The government will set up a Rs 41,600 crore fund under National Credit Guarantee Trustee Company Limited (NCGTC) for this scheme. Here are some Frequently Asked Questions (FAQ) on Guaranteed Emergency Credit Line of Rs 3 lakh crore. #casansaar (Source - MoneyControl)

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