Govt launches credit guarantee scheme for benefit of MSMEs - The Statesman

Govt launches credit guarantee scheme for benefit of MSMEs

MSMEs, Nitin Gadkari, Narendra Modi, Nirmala Sitharaman

Union Minister for MSME, Nitin Gadkari. (File Photo: IANS)

The Ministry of MSME on Wednesday launched an innovative scheme of Rs 20, 000 crore for financing the MSMEs which are stressed or have NPA accounts by the end of April 2020.

This scheme will help two lakh MSMEs.

This was informed by Minister of Road Transport & Highways, Micro, Small & Medium Enterprises Nitin Gadkari who shared the launch of the ‘Distressed Assets Funds-Subordinate Debt for MSMEs’, the credit guarantee scheme for sub-ordinate debts, providing relief to about 2 lakh Micro, Small and Medium Enterprises (MSMEs).


This scheme will support the promoters of the operational MSMEs which are financially stressed under banking rules.

The guarantee cover worth Rs 20,000 crore will be provided to the promoters who can take debt from the banks to further invest in their stressed MSMEs as equity, hence maintaining liquidity and debt-equity ratio.

90% guarantee coverage for this sub-debt will be given under the Scheme and 10% would come from the concerned promoters.

Gadkari expressed thanks to Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman for further extending support to the MSME sector.