New Delhi, May 28 (KNN) Eligible Micro, Small and Medium Enterprises (MSMEs) borrowers will get an offer from their lending institutions for a pre-approved loan under the Rs 3 lakh crore scheme announced for MSMEs, revealed National Credit Guarantee Trustee Company (NCGTC) in its FAQs.

The Frequently Asked Questions (FAQs) also said that scheme is a specific response to the unprecedented situation COVID-19.

It seeks to provide much needed relief to the MSME sector by incentivizing MLIs to provide additional credit of up to Rs. 3 lakh crore at low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.

''This is a pre-approved loan. An offer will go out from the MLI to the eligible borrowers for a pre-approved loan which the borrower may choose to accept. If the MSME accepts the offer, it will be required to complete requisite documentation,'' it said.

''An ‘opt-out’ option will be provided to eligible borrowers under the Scheme, i.e., if the borrower is not interested in availing the loan, he/she may indicate accordingly, it added.

Interest rates under the scheme have been capped at 9.25% for banks and financial institutions, and at 14 per cent for NBFCs.

The tenor of loans provided under GECL shall be four years from the date of disbursement. No pre-payment penalty shall, however, be charged by the MLIs in case of early repayment.

A moratorium period of one year on the principal amount shall be provided for GECL funding.

Interest shall, however, be payable during the moratorium period. The principal shall be repaid in 36 instalments after the moratorium period is over.

All MSME borrower accounts with combined outstanding loans across all MLIs of up to Rs. 25 crore as on February 29, and an annual turnover of up to Rs. 100 crore in FY 2019-20 are eligible to avail the benefit under the scheme.

The loan will be extended in the form of additional working capital term loan facility in case of banks and additional term loan facility in case of NBFCs to eligible MSMEs/ business enterprises and interested Pradhan Mantri Mudra Yojana (PMMY) borrowers.