Boosting MSME Growth: New Credit Guarantee Scheme Unveiled

The government has launched a Mutual Credit Guarantee Scheme for MSMEs, offering credit guarantees for equipment purchases. The initiative aims to support manufacturing growth by providing collateral-free loans up to Rs 100 crore. The scheme will be active for four years, boosting manufacturing and 'Make in India'.

The government has introduced a new initiative to bolster the MSME sector. The Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) offers credit guarantee coverage for loans of up to Rs 100 crore, aligning with the FY25 Budget announcement to enhance manufacturing capabilities.

According to the finance ministry, the scheme provides a 60 percent guarantee by the National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs). Eligible MSMEs must meet specific criteria, including possessing a valid Udyam Registration Number, and pledging at least 75 percent of the project cost for equipment or machinery purchases.

The scheme anticipates an expansion in manufacturing by facilitating access to necessary credit for plant and machinery purchases. The manufacturing sector, contributing significantly to GDP and employment, is set for accelerated growth with this government-backed financial support.

(With inputs from agencies.)