Empowering MSMEs with News & Insights

Govt operationalises Rs 20,000 crore stressed fund for MSMEs

Updated: Aug 19, 2020 02:01:04pm
image

Govt operationalises Rs 20,000 crore stressed fund for MSMEs

New Delhi, Aug 19 (KNN) In a bid to provide financial facility to stressed Micro, Small and Medium Enterprises (MSMEs), the government has operationalised Rs 20,000 crore stressed fund which is likely to benefit around 2 lakh Small and Medium entrepreneurs.

In this regard on Wednesday, the government issued guidelines for Credit Guarantee Scheme for Subordinate Debt (CGSSD) which is a part of the Rs 20.97 lakh crore Aatma Nirbhar Bharat Abhiyan package announced by Prime Minister Narendra Modi.

Confirming the same, the MSME ministry took to twitter and said, "Govt. has given yet another facility for financially stressed MSMEs. The sub-debt scheme has been launched. All preparation is done. All PSU Banks and some Pvt Banks are on board. Contact your bank & be #msmetochampions. @FinMinIndia @DFS_India @CGTMSEOfficial."

Launched in June by the MSME minister Nitin Gadkari, the Scheme is named as ‘Distressed Assets Fund -Subordinate Debt for Stressed MSMEs’ and the credit product for which guarantee would be provided under the Scheme shall be named as ‘Credit Guarantee Scheme for Subordinate Debt (CGSSD)’.

90% guarantee coverage would come from scheme/ Trust and remaining10% from the concerned promoter(s).

The objective of the scheme is to provide personal loan through banks to the promoters of stressed MSMEs for infusion as equity/ quasi equity in the business eligible for restructuring, as per RBI guidelines for restructuring of stressed MSME advances.

The scheme is applicable for those MSMEs whose accounts have been standard as on 31.03.2018 and have been in regular operations, either as standard accounts, or as NPA accounts during financial year 2018-19 and financial year 2019-20.

According to the guideline, Fraud/ Willful defaulter accounts will not be considered under the proposed scheme.

The scheme is valid for MSME units which are stressed, viz. SMA-2 and NPA accounts as on 30.04.2020 who are eligible for restructuring as per RBI guidelines on the books of the lending institutions.

COMMENTS

    Be first to give your comments.

LEAVE A REPLY

Required fields are marked *