
Summary:
The recent inauguration of the MCGS-MSME credit guarantee scheme, which covers loans up to Rs. 100 crore (US$ 11.6 million), aims to stimulate investment, production, and exports. Exporters have stated that limited funding has hindered MSMEs from expanding internationally. The scheme provides qualifying MSMEs with 60% guarantee coverage when securing loans for equipment and machinery. To qualify, MSMEs must meet criteria such as possessing an Udyam Registration Number and allocating 75% of the loan to equipment or machinery.
The Federation of Indian Export Organisations (FIEO) emphasized that the new loan guarantee scheme will significantly improve financial access for micro, small, and medium-sized enterprises, particularly those in manufacturing and exports. The initiative supports the "Make in India, Make for the World" vision by helping businesses increase production, improve quality, and expand globally. Export credit rates for MSMEs range from 10% to 11.5%, while term loans range from 11% to 13.5%. This initiative will run for four years or until a total guarantee of Rs. 7 lakh crore (US$ 80.9 billion) is reached.
Source: IBEF
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