Atma Nirbhar Bharat Abhiyan – Stressed MSMEs to get Rs 20,000 crore subordinated debt
- Finance minister Nirmala Sitharaman announced a Rs 20,000 crore of subordinated debt benefit for stressed micro, small and medium enterprises (MSMEs).
- 200,000 stressed MSMEs will stand to benefit.Atma Nirbhar Bharat Abhiyan to provide a stimulus to the economy amidst the Coronavirus outbreak.
- Subordinate debt is concerned, MSMEs which are stressed or are non-performing assets will be eligible for this scheme.
- The government will provide a contribution of Rs 4,000 crore to Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE).
- Promoters of the MSME will be given debt by banks, which will then be infused by promoter as equity in the unit.
About Subordinated Debt-
- Subordinated debt is an unsecured loan or bond which ranks below other securities or senior loans with respect to the claims on assets or earnings.
- If a borrower defaults, the creditors who own subordinated debt will not be paid out until after senior bondholders are paid the dues in full. These loans usually have higher yield and lower credit rating.
About MSME-
- The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India.
- Minister of MSMEs – Nitin Gadkari
- Minister of State – Pratap Chandra Sarangi
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