About Mutual Credit Guarantee Scheme:
- It provides 60 % guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions for credit facilities up to 100 crore rupees sanctioned to eligible MSMEs under MCGS-MSME for purchase of equipment and machinery.
- Salient Features of Mutual Credit Guarantee Scheme:
- Target: Borrower should be an MSME with valid Udyam Registration Number.
- The eligibility criteria have also been expanded to service sector MSMEs.
- The minimum project cost requirement towards machinery and equipment has been reduced to 60 per cent from the earlier 75 per cent.
- The 5% upfront contribution has been made refundable, with one per cent returned each year from the fourth year onwards, subject to satisfactory loan performance.
- The credit guarantee would expire after 10 years, as compared to the unspecified period in the earlier scheme.
- It is applicable to all loans sanctioned under MCGS-MSME during the period of 4 years or till cumulative guarantee of 7 lakh crore are issued, whichever is earlier.
- Eligible exporters:
- Profitable units having exported at least 25% of their sales turnover in each of previous 3 financial years
- Guaranteed loan amount is pegged at ₹20 crore, and upfront contribution is 2% of the loan amount, a maximum of ₹40 lakh, with 1% each refundable in the 4th and 5th year of the guarantee period.
