Credit Guarantee Scheme for MSMEs (MCGS-MSME)

 The government recently approved the introduction of a new credit guarantee scheme for the micro, small and medium enterprises (MSMEs) that was announced in the FY25 Budget.

• About the scheme: Applicable for four years from the date of operational guidelines or until a cumulative guarantee of ₹7 lakh crore is issued.
• Loan Coverage: Provides credit guarantee for loans up to ₹100 crore for MSMEs to procure equipment and machinery.
• Guarantee Coverage: 60% guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs).
• Collateral-Free Loans: Facilitates loans without collateral from banks and financial institutions for MSMEs' expansion and growth.
• Eligibility Criteria: MSMEs must have a valid Udyam Registration Number.

o Loan amount under the scheme cannot exceed ₹100 crore.

o Minimum cost of equipment/machinery must be 75% of the project cost.