NEWS – Mutual Credit Guarantee Scheme (MCGS-MSMEs)  approved by Central Government

HIGHLIGHTS

Purpose: Guarantee loans for Micro, Small, and Medium Enterprises (MSMEs) to purchase equipment/machinery.

Guarantee Coverage: 60% by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs).

Salient Features:

• Eligibility: MSME with valid Udyam Registration Number.
• Loan Guarantee Limit: Up to ₹100 crore.
• Minimum Project Cost Allocation for Equipment/Machinery: 75%.
• Repayment Period:
  • Up to ₹50 crore loan: Up to 8 years (max. 2 years moratorium on principal).
  • Above ₹50 crore loan: Higher repayment schedule and moratorium possible.
• Upfront Contribution: 5% of loan amount (at guarantee cover application).
• Annual Guarantee Fee:
  • Year of Sanction: Nil.
  • Next 3 Years: 1.5% p.a. of loan outstanding (as of March 31 of previous year).
  • Thereafter: 1% p.a. of loan outstanding (as of March 31 of previous year).
• Scheme Applicability:
  • 4 years from the date of operational guidelines issuance.
  • OR till cumulative guarantee of ₹7 lakh crores is issued.
  • Whichever is earlier.