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MSME sector gets another push from govt; distressed MSMEs to get Rs 20,000 cr guarantee cover.
Jun 25, 2020

India’s distressed MSME sector got another push from the government today with the launch of a Credit Guarantee Scheme to help the country’s Micro, Small and Medium Enterprises. As Prime Minister Narendra Modi looks to make India self-reliant by bolstering manufacturing, Union Minister Nitin Gadkari on Wednesday rolled out a subordinate debt scheme to provide Rs 20,000 crore guarantee cover to two lakh micro, small and medium enterprises. This also entails a sub-debt facility to the promoters of those operational MSMEs that are distressed or have become non-performing assets (NPAs) as on 30 April 2020. It also guarantees cover to the promoters who can take debt from the banks to further invest in their stressed MSME units as equity.
'It was being felt that the biggest challenge for stressed MSMEs was in getting capital either in the form of debt or equity. Therefore, as part of Atmanirbhar Bharat package, on May 13, 2020, Finance Minister (Nirmala Sitharaman) had announced this scheme of sub-ordinate debt to the promoters of operational but stressed MSMEs,' a statement from the Ministry of Micro, Small & Medium Enterprises said.

Financial Express