FII welcomes Rs 3 lakh crore collateral free loan for MSMEs

New Delhi, May 15 (KNN) Federation of Indian Industries (FII) has welcomed the allotment of Rs. 3 lakh crore as collateral free automatic loan for businesses including Micro Small and Medium Enterprises (MSMEs).

''We thank you Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to have accepted many of the demands raised by FII for the economy of the country,'' said Director General Deepak Jain in a statement.

''They have allotted Rs 3 lakh crore as collateral free automatic loan for businesses including MSMEs. It is a very welcome step and it was needed,'' he added.

He further said that FII had requested for 10 years of repayment period but they have agreed to 4 years tenure with 12 months moratorium and government will stand guarantee for such loans which will benefits 45 lakh units.

Jain said that equity infusion of Rs 50,000 crores has been done as mother of funds for MSME adding that ''Government proposes to revise the investment limit and turnover criteria is also being introduced in definition of MSME.''

In the long run, it may not be in the interest of MSME. The provision for disallowing global tenders upto Rs 200 crores is a welcome step. The new self-reliant India will be supporting the Make in India mission of the government, he avowed.

''We welcome the steps taken by and shall continue to support the positive steps of the government,'' he concluded.

Finance Minister Nirmala Sitharaman on Wednesday had announced Rs 3 lakh crore collateral free loan for Micro Small and Medium Enterprises (MSMEs).

''The collateral free loans are for those with upto Rs 25 crore outstanding loan or Rs 100 crore turnover. The tenure of the loan will be 4-year and moratorium of 12 months,'' said FM at a press conference.

The Finance Minister also announced 100% credit guarantee cover to banks and Non-Banking Financial Corporation (NBFCs) on principal and interest which will benefit 45 lakh units.