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13/05/2020 04:31pm

FM announces Rs 3 lakh crore collateral free loan for MSMEs

image FM announces Rs 3 lakh crore collateral free loan for MSMEs

New Delhi, May 13 (KNN) Finance Minister Nirmala Sitharaman on Wednesday 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.

Sitharaman further said that the government will create a Fund of Fund to infuse Rs 50,000 crore as equity for MSMEs which are viable businesses and need hand holding.

She also said that in order to provide stressed MSMEs with equity support; government will facilitate the provision of Rs. 20,000 crores as subordinate debt.

"This will enable 45 lakh MSME units to resume business activity and also safeguard jobs," she added.

There was another positive news from the FM as she said that for government procurement, tenders up to Rs 200 crore will no longer be under global tender route. Earlier MSMEs, used to get disqualified and disallowed from participation.

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