Centre plans to launch credit guarantee scheme to enable collateral free loans up to Rs 1 billon for MSMEs

The government has announced that a new credit guarantee scheme will soon be introduced in the cabinet, enabling micro, small, and medium enterprises (MSMEs) to access collateral-free loans of up to Rs 1 billion. The loans will be provided through a new credit assessment model by public sector banks (PSU banks). This move will enable MSMEs to get term loans for expansion like machinery and plants which were difficult to access earlier.