Government announces Rs.3 lakh crore collateral-free automatic loans for MSMEs
Government announces Rs.3 lakh crore collateral-free automatic loans for MSMEs
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Government announces Rs.3 lakh crore collateral-free automatic loans for MSMEs

  • Finance Minister Nirmala Sitharaman announced Rs 3 lakh crore collateral free automatic loan for businesses, including MSMEs.
  • Business/MSMEs have been badly hit due to COVID19 need additional funding to meet operational liabilities built up, buy raw material and restart business.
  • Decision- Emergency Credit line to Business/MSMEs from Banks and NBFCs up to 20% of entire outstanding credit as on 29th February 2020.
  • Borrowers with up to Rs.25 crore outstanding and Rs.100 crore turnover eligible.
  • Loans to have 4 year tenor with moratorium of 12 months on Principal repayment.
  • Interest to be capped
  • 100% credit guarantee cover to Banks and NBFCs on principal and Interest
  • Scheme can be availed till 31st October 2020.
  • No Guarantee fee, no fresh collateral.
  • 45 lakh units can resume business activity and Safeguards jobs.

About Collateral Free Loans-

collateral free loan is a loan provided to the borrower without any guarantee. In simple terms, this means, you can approach a lender and borrow money from him at a certain rate of interest even if you have nothing to pledge or invest.

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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