Scheme with Guarantee Cover worth Rs 20,000 Crore launched for MSMEs
This scheme was announced as a part of the AtmaNirbhar Bharat Package by Finance Minister back on 13th May 2020. On 24th June 2020, the Credit Guarantee Scheme for Sub-ordinate Debt (CGSSD) was launched. The scheme is also called as Distressed Assets Fund- Sub- Ordinate Debt for MSMEs.
Union Minister of Medium, Small and Marginal Enterprises (MSMEs) Nitin Gadkari launched the scheme. After consultation with the Reserve Bank of India, SIDBI, and the Ministry of Finance, the scheme was approved by the Committee on Economic Affairs.
As a result of nationwide lockdown to contain the spread of COVID-19, most of the economic activities came to a halt across the globe. In India as well, the livelihood of millions of people is dependent on the MSME sector.
As per data available to the Government, the biggest challenge that was faced by these MSMEs was in getting capital for restarting their businesses.
About the Scheme
The scheme will provide support to about 2 lakh MSMEs across the country. Rs 20,000 crores of guarantee cover have been sanctioned under the scheme.
The guarantee cover under the scheme will be provided from banks to the promoters. Only those promoters, who’s MSMEs have either become a Non-Performing Asset (NPA) or are financially stressed as on 30th April 2020 will be eligible for the scheme.
Through Credit Guarantee Fund Trust for Mirco and Small Enterprises (MSEs), the scheme will be implemented.