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Government extends credit guarantee scheme for small units



The government has extended the credit guarantee scheme for stressed small units till the end of this financial year.

The credit guarantee scheme for subordinated debt for Micro, Small and Medium Enterprises (MSMEs), which are financially stressed, has been extended by the government till March 31, 2022.

The Center had approved the scheme on June 1, 2020, at a time when the nationwide lockdown was imposed and such units were facing existential crisis due to sudden shutdown of operations and non-availability of labour.

The scheme started on June 24, 2020 and was scheduled to continue till March 31, 2021. However, after receiving several requests from stakeholders and beneficiaries, the government extended it by six months till September 30, 2021.

Now amid the constant demands of the MSME sector to continue this, the government has extended it till the end of the current financial year.

A statement issued by the Ministry of MSME said that the government had earlier expanded the scheme keeping in view the repeated requests of the stakeholders and to keep the avenues of financial assistance open for the stressed units.

The main objective of the scheme is to provide loan guarantee to stressed MSMEs for their restructuring through Non-Performing Asset Accounts and Special Mention Accounts.

Up to 90 per cent of the loan guarantee comes through the scheme, while the promoter has to provide the remaining 10 per cent.


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