Rs 3 lakh crores Collateral free Automatic Loans for Businesses, including MSMEs

• Businesses/MSMEs have been badly hit due to COVID 19 need additional funding to meet operational liabilities built up, buy raw material and restart business.
• Decision Emergency Credit Line to Businesses/MSMEs from Banks and NBFCs up to 20 of entire outstanding credit as on 29 2 2020.
• Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover eligible.
• Loans to have 4-year tenor with a 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 31 st Oct 2020
• No guarantee fee, no fresh collateral
• 45 lakh units can resume business activity and safeguard jobs.

Rs 20,000 crores Subordinate Debt for Stressed MSMEs

• Stressed MSMEs need equity support.
• GoI will facilitate the provision of Rs 20 000 cr as subordinate debt.
• Two lakh MSMEs are likely to benefit.
• Functioning MSMEs which are NPA or are stressed will be eligible.
• Govt will provide a support of Rs 4 000 Cr to CGTMSE.
• CGTMSE will provide partial Credit Guarantee support to Banks.
• Promoters of the MSME will be given debt by banks, which will then be infused by promoter as equity in the Unit.

Rs 50,000 cr. Equity infusion for MSMEs through Fund of Funds

• MSMEs face a severe shortage of Equity.
• Fund of Funds with Corpus of Rs 10,000 crores will be set up.
• Will provide equity funding for MSMEs with growth potential and viability.
• FoF will be operated through a Mother Fund and few daughter funds.
• Fund structure will help leverage Rs 50,000 cr of funds at daughter funds level.
• Will help to expand MSME size as well as capacity.
• Will encourage MSMEs to get listed on the main board of Stock Exchanges.

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