Govt launches 100cr Mutual Guarantee Scheme for MSMEs March 22, 2025 MSME Sampark Msme News 0 New Delhi: In a significant move to boost credit access for Micro, Small, and Medium Enterprises (MSMEs), Minister of State for Finance, Pankaj Choudhary, informed the Rajya Sabha on March 18, 2025, about the launch of the Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME). The scheme aims to provide eligible MSMEs with credit facilities of up to ₹100 crore, backed by a 60% guarantee to encourage investment in equipment and machinery. Key Features of the MCGS-MSME The scheme is being implemented by the National Credit Guarantee Trustee Company Limited (NCGTC), a wholly owned entity under the Department of Financial Services, Ministry of Finance. It covers loans provided by Scheduled Commercial Banks (SCBs), All India Financial Institutions (AIFIs), and Non-Banking Financial Companies (NBFCs) under its guarantee framework. Eligibility Criteria for MSMEs MSMEs must have a valid Udyam Registration Number. They should not be classified as Non-Performing Assets (NPA) with any lender. At least 75% of the total project cost must be allocated to equipment or machinery purchases. How the Scheme Works Once an MSME applies for a loan under this scheme, the Member Lending Institution (MLI) must submit loan details to the NCGTC portal along with the required fees. Upon successful verification, the 60% credit guarantee coverage is confirmed, reducing lending risks and making finance more accessible for MSMEs. Additional MSME Taxation Relief Measures The introduction of the MCGS-MSME scheme aligns with recent government initiatives aimed at easing financial and tax compliance burdens for small businesses. Key tax reforms include: Presumptive taxation benefits under Sections 44AD & 44AE of the Income-tax Act. Tax audit relaxations under Section 44AB. Omission of Tax Collected at Source (TCS) on the sale of specific goods under Section 206C. Rationalization of Tax Deducted at Source (TDS) rates to streamline compliance. Driving MSME Growth & Economic Development The MCGS-MSME is a crucial step in ensuring the long-term sustainability and expansion of small businesses. By reducing credit risks for lenders, the government aims to enhance MSME financing, boost capital investment in machinery, and ultimately drive economic growth. With financial assistance, tax relaxations, and digitization efforts, the government continues to strengthen the MSME ecosystem, ensuring small businesses have the support they need to thrive in a competitive market. Disclaimer: This summary is for informational purposes and readers should verify specific details through official reports or consult industry professionals for comprehensive insights. Popular Articles Msme News Power Ministry to Introduce Rs 1,000-Crore Scheme for Energy Efficiency in MSMEs Msme News PLI Scheme: A Game Changer for MSME Growth in Manufacturing & Exports Msme News Fabindia Partners with Ministry of MSME to Empower India’s Traditional Artisans Under PM Vishwakarma Scheme Msme News Delhi MSMEs Visited by High-Level German Delegation from Friedrich Naumann Foundation IPO News Sodhani Academy of Fintech Enablers IPO: Day 3 – Subscription Status, GMP, Key Dates, and More IPO News NTPC Green Energy IPO: Special Benefits for NTPC Shareholders and Employees Msme News Indian Bank Reports ₹700 Crore Profit from Priority Sector Lending Certificates Msme News FISME and GAME Organize High-Level Roundtable on MSME Financing in New Delhi Msme News MSMEs in North Bengal to Flourish with Government’s ₹15 Crore Plan Msme News Jammu Industrialists Seek Chief Minister’s Intervention for MSME Revival PreviousNext
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