The ‘Mutual Credit Guarantee Scheme for MSMEs’ was introduced by the Centre on Monday. It was announced in the Union Budget 2024-25 to support micro, small, and medium-sized businesses.
By offering loans up to Rs 100 crore for the purchase of plant, machinery, or equipment, the scheme enables MSMEs to obtain loans without the need for collateral.
The program will give member lending institutions (MLIs) 60% guarantee coverage by the National loan Guarantee Trustee Company Ltd (NCGTC) for a loan facility up to Rs 100 crore that is approved for qualified MSMEs under MCGS-MSME for the purchase of machinery or equipment.
Union Finance Minister Nirmala Sitharaman launched the program here and gave sanction letters to Mumbai-based MSMEs that qualified.
It is anticipated that the program will make it easier for MSMEs to obtain finance and significantly strengthen India’s manufacturing industry.
The scheme stipulates that an MSME with a valid Udyam Registration Number must be the borrower, that the loan amount guaranteed cannot exceed Rs 100 crore, that the project cost may be greater, and that the minimum cost of equipment or machinery must be 75% of the project cost.
During the post-Budget interaction event with stakeholders here, FM Sitharaman and Minister of State for Finance Pankaj Chaudhary also gave the keys to homeowners who had benefited from the SWAMIH (Special Window for Affordable and Mid-Income Housing) Fund.
Over 50,000 homes have been successfully delivered by the SWAMIH Fund as of January 24, 2025, and 20,000 more homes will be delivered annually for the following three years.
SWAMIH Fund 2 will be created as a hybrid finance facility with contributions from the government, banks, and private investors, as stated in the Union Budget 2025–2026.
The goal of this Rs 15,000 crore financing is to quickly finish an additional 1 lakh units.
The Finance Minister told reporters after the ceremony that the government-guaranteed loan in the current Budget was one of three budgets that concentrated on enhancing MSMEs.
She emphasised that the government’s priorities had not changed from capital to consumption spending.
FM Sithraraman added that the Centre is working on additional insurance reforms, including allowing 100% foreign direct investment (FDI).
The current budget suggests increasing the insurance industry’s FDI cap from 74% to 100%.
She noted that safeguards are being put in place to ensure that the money that citizens use to pay their insurance premiums stays in the nation.
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