Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME)
Key Points: - Objective: Facilitate credit availability for purchase of plant, machinery and equipment by MSMEs to boost manufacturing under Make in India - Approval Date: January 29, 2025 by the Union Cabinet - Implementing Agency: National Credit Guarantee Trustee Company Limited (NCGTC) - Loan Amount: Up to ₹100 crore for equipment/machinery purchase - Guarantee Coverage: 60% of loan amount by NCGTC to Member Lending Institutions - Eligibility: Valid Udyam Registration; equipment/machinery must be minimum 75% of project cost - Fee Structure: 5% upfront contribution; Nil annual fee in sanction year; 1.5% p.a. for Years 2-4; 1% p.a. from Year 5 - Repayment: Up to 8 years for loans ≤₹50 crore, with up to 2 years moratorium on principal - Scheme Duration: 4 years or till cumulative guarantee of ₹7 lakh crore is issued - Beneficiaries: All registered MSMEs across India
- Mutual Credit Guarantee Scheme for MSMEs approved on 29 January 2025 to facilitate credit for purchase of plant, machinery, and equipment
- Loan amount up to ₹100 crore for equipment/machinery purchase with 60% guarantee coverage by NCGTC to lending institutions
- Equipment/machinery must be minimum 75% of project cost; valid Udyam Registration required
- Fee structure: 5% upfront contribution, nil annual fee in sanction year, 1.5% p.a. for Years 2-4, 1% p.a. from Year 5
- Repayment: Up to 8 years for loans up to ₹50 crore with up to 2 years moratorium on principal
- Scheme duration: 4 years or till cumulative guarantee of ₹7 lakh crore is issued; implemented by NCGTC under Make in India
What is the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME)?
A central scheme to facilitate credit availability for purchase of plant, machinery and equipment by MSMEs, boosting manufacturing under Make in India. It was approved by the Union Cabinet on January 29, 2025.
What is the maximum loan amount and guarantee coverage?
The scheme provides loans up to 100 crore for equipment/machinery purchase, with NCGTC guaranteeing 60% of the loan amount to Member Lending Institutions.
Who is eligible under the scheme?
MSMEs with valid Udyam Registration are eligible, provided equipment/machinery accounts for a minimum 75% of the project cost.
What is the fee structure for borrowers?
Borrowers pay a 5% upfront contribution, nil annual fee in the sanction year, 1.5% per annum for Years 2-4, and 1% per annum from Year 5 onwards.
What is the repayment period?
Repayment is up to 8 years for loans of 50 crore or less, with up to 2 years moratorium on principal.
How long will the scheme be operational?
The scheme runs for 4 years or until cumulative guarantee of 7 lakh crore is issued, implemented by NCGTC under the Ministry of Micro, Small and Medium Enterprises.
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