Finance Minister Nirmala Sitharaman announced during the budget on Saturday an increase in the credit guarantee cover under the CGTMSE scheme for startups and the MSMEs. This will help micro and small enterprises in receiving formal loans easily.
Increase in the startup MSME credit guarantee to Rs 20 crore from the current Rs 10 crore is a great step in allowing ease of working capital financing for startup MSMEs, according to Kunal Bahl, chief executive officer of Snapdeal.
For micro and small enterprises, the cover is increased from 5 crore to Rs 10 crore, resulting in an extra credit of Rs 1.5 lakh crore over the next five years. While for startups, it increased from the current Rs 10 crore to Rs 20 crore, reducing the guaranteed fee to 1% for loans in 27 focus sectors.
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