Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME)

The Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME), launched by Finance Minister Nirmala Sitharaman in Mumbai, aims to provide collateral-free loans to Micro, Small, and Medium Enterprises (MSMEs) to boost the manufacturing sector in India.

Key Features of the MCGS-MSME Scheme

• Loan Amount: Up to ₹100 crore for purchasing plant, machinery, or equipment.
• Guarantee Coverage: 60% of the loan amount will be guaranteed by the National Credit Guarantee Trustee Company Ltd (NCGTC).
• Eligible Borrowers: MSMEs with a valid Udyam Registration Number.
• Project Cost Requirement:
  • The guaranteed loan cannot exceed ₹100 crore, but the total project cost can be higher.
  • At least 75% of the project cost must be allocated for machinery or equipment purchase.
• Member Lending Institutions (MLIs): Banks and financial institutions that participate in the scheme.

Objective & Impact

• Improves credit access for MSMEs without the need for collateral.
• Strengthens manufacturing capacity, supporting Make in India and Aatmanirbhar Bharat.
• Encourages technological upgrades and expansion in MSMEs.