RAS question
Collateral guarantee coverage for Micro & Small exporters?
Correct answer: (D) 85%.
Micro and Small exporters can get collateral guarantee coverage of up to 85% under the Collateral Support for Export Credit component of the Export Promotion Mission.
Explanation
The Collateral Support for Export Credit component under the Export Promotion Mission is meant to improve access to formal export credit for MSME exporters that face constraints in providing collateral security. The cited guideline states that eligible MSME exporters may receive credit guarantee support for export-related working capital loans from member lending institutions. Within that framework, the coverage is higher for Micro and Small exporters: up to 85% of the sanctioned loan amount, subject to the notified ceiling. Medium exporters are treated separately and receive 65% coverage. Therefore, for a question asking specifically about Micro and Small exporters, 85% is the only supported figure.
Why the other options are wrong
- (A) 50% is not the notified collateral guarantee coverage for Micro and Small exporters in the guideline.
- (B) 65% applies to Medium exporters, not to Micro and Small exporters.
- (C) 75% is not stated as the coverage level for Micro and Small exporters under this component.
Concept
This tests MSME export-credit support under Indian Economy, especially the design of government-backed credit guarantee schemes. It recurs in RAS because such schemes link industry policy, export promotion and access to finance for smaller enterprises.