Union Finance and Corporate Affairs Minister Launches Mutual Credit Guarantee Scheme (MCGS) for MSME

Union Finance and Corporate Affairs Minister Launches Mutual Credit Guarantee Scheme (MCGS) for MSME

The MCGS-MSME is a scheme designed to provide term loans up to Rs. 100 crore to Micro, Small, and Medium Enterprises (MSMEs) from Eligible Lending Institutions.

Key Features of MCGS-MSME

• Trust/Fund: The Mutual Credit Guarantee Fund-MSME (MCGF-MSME) has been established to manage the scheme. It is formed by the Department of Financial Services (DFS), Ministry of Finance, and managed by the National Credit Guarantee Trustee Company Limited (NCGTC), a wholly owned entity of DFS.
• Guarantee Coverage: The scheme offers a 60% guarantee coverage by NCGTC to Member Lending Institutions (MLIs) for loans sanctioned under MCGS-MSME.
• Member Lending Institutions (MLIs): These include financial institutions such as commercial banks and NBFCs that are registered with NCGTC under the scheme.
• Eligible Borrowers: MSMEs with valid Udyam Registration, not listed as Non-Performing Assets with any lender, and with at least 75% of the project cost allocated for equipment/machinery.
• Duration of the Scheme: The scheme is available for 4 years or until Rs. 7 lakh crore in guarantees are issued, whichever comes first.

Impact of MCGS-MSME

• Boost to Manufacturing: The scheme enhances credit access for MSMEs, helping them expand and upgrade their equipment.
• Support for Make in India: It strengthens domestic manufacturing, contributing to an increase in its GDP share towards 25%.
• Global Competitiveness: It enables MSMEs to scale up, positioning India as a key player in the global supply chain.

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