Mutual Credit Guarantee Scheme for MSMEs

In February 2025, the Government approved the Mutual Credit Guarantee Scheme (MCGS) to support MSMEs, aligning with the 2024-25 Budget initiative to boost the manufacturing sector.

Key Features of MCGS

(i) Credit Guarantee Coverage

  • Provides 60% guarantee through the National Credit Guarantee Trustee Company Ltd. (NCGTC) to banks and NBFCs.

(ii) Eligibility Criteria

  • MSMEs with valid Udyam Registration.
  • At least 75% investment in machinery.
  • No NPA classification.

(iii) Operational Tenure: Four years or until Rs. 7 lakh crore in guarantees are issued.

(iv) Loan Terms

  • Up to Rs. 50 crore: Eight-year repayment period, including a two-year moratorium.
  • Above Rs. 50 crore: Flexible repayment terms.

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