MSME: Loan up to ₹100 Crore with 60% Guarantee

The Government of India has launched a new loan guarantee scheme for the Micro, Small, and Medium Enterprises (MSME) sector as per the Union Budget 2024-25. The scheme offers loans of up to ₹100 crore with a 60% credit guarantee coverage.

According to a statement from the Ministry of Finance, the Mutual Credit Guarantee Scheme (MCGS-MSME) aims to support eligible enterprises in acquiring equipment. The National Credit Guarantee Trustee Company Limited (NCGTC) will provide 60% coverage to Member Lending Institutions (MLIs).

Eligibility Criteria

• The borrower must be a registered MSME with a valid Udyam Registration Number.
• The guaranteed loan amount must not exceed ₹100 crore.
• The minimum cost of equipment should be at least 75% of the project cost.

Guarantee Fee Structure

No annual guarantee fee will be charged during the year of loan sanction.

For the next three years, an annual fee of 1.5% will apply on the outstanding loan of the previous year. After that, it will be 1% annually based on the total outstanding loan as of March 31 of the previous year.

Scheme Duration

The scheme will be applicable for a period of four years from the date of issuing operational guidelines or until a cumulative guarantee of ₹7 lakh crore is issued—whichever is earlier.

This initiative aims to strengthen the MSME sector and encourage investments in productivity-enhancing assets.