New Delhi: Finance Minister Nirmala Sitharaman on Wednesday announced collateral free automatic loans for businesses including MSMEs up to Rs 3 lakh crore.
Under the measure, borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover would be eligible for the special collateral free loan.
The loan will have a 4 year tenor with moratorium of 12 months on principal repayment and the interest will be capped.
There will be a 100 per cent credit guarantee cover to banks and NBFCs on principal and interest. The initiative can be availed till October 31, 2020, and no guarantee fee and fresh collateral would be required.
On the back of the scheme, 45 lakh units can resume business activity and safeguard jobs.
Sitharaman also detailed six measures for supporting the country's MSME sector under the Centre's massive stimulus programme.
Accordingly, the investment limit for defining MSMEs has been revised upwards, said the FM. Besides, she highlighted that additional criteria such as turnover has been considered for defining MSMEs.
The Centre has also decided not to go in for global bidding for government procurement for tenders up to Rs 200 crore, thereby, promoting the participation of MSMEs, she said.
In addition, e-market linkage for MSMEs will also be provided and that CPSEs will pay all receivables to MSMEs within 45 days.
The move is part of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday evening.
It is one among the schemes announced by the Finance Minister on Wednesday.
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