The introduction of the MSME loan warranty system (MCGS-MSME) was approved by the Center. This system will provide 60% warranty coverage by National Credit Gualeded Trastee Trustee Company Limited (NCGTC) for credit institutions for credit equipment up to Rs.100 crore sanctioned MSME for purchasing equipment/machinery.
This system will provide 60% warranty coverage to members of credit institutions (MLIS) for credit equipment up to Rs.100 Crore awarded to qualified MSME. MLIS includes all planned Komerční banka (SCB), non -banking financial companies (NBFC) and all financial institutions in India (AIFI) that are recorded in this initiative in NCGTC.
Loans up to 100 Crore RS will be issued for the acquisition of plant and machinery or equipment are eligible for warranty coverage within the system, which aims to support the production sector.
This regime will apply to all loans sanctioned according to MCGS-MSME until 4 years from the date of the system's operating instructions or to the RS cumulative warranty. 7 Lakh crore is achieved, depending on what comes first.
“In order to increase production by facilitating the availability of a loan for the purchase of plant and machines / equipment, the mutual warranty for MSME (MCGS-MSME) is introduced. The scheme will facilitate loans without the bank collateral and the financial funds of the MSME institution that need debt capital for their expansion and growth, ”the Ministry of Finance said in its statement.
Key
- In order for the debtor to be eligible for the loan warranty system, a micro, small and medium enterprise (MSME) must be registered with the valid registration number UDYAM.
- The guaranteed loan amount should not exceed Crore Rs.100, while the project costs may be higher. Minimum equipment/machine costs should be 75% of the project costs.
- For loans up to crore Rs. 50 can be a repayment period of up to 8 years with a moratorium up to 2 years during main installments. Loans over Rs.50 crore may have a different repayment and moratorium plan.
- The initial contribution to 5% of the amount of the loan must be stored at the time of the request for warranty coverage.
- There is no annual warranty fee during the year.
- From the second to fourth year, the fee is 1.5% of the outstanding amount of the loan for 31 of the previous year.
- Then the annual warranty fee is 1% of the outstanding amount of the loan of 31. March of the previous year.
