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Government launches mutual credit guarantee scheme for MSMEs

18 Feb 2025 Evaluate

In a major step, the government has launched the Mutual Credit Guarantee Scheme for MSMEs (MCGS MSME) for facilitating loans up to Rs 100 crore to MSMEs for purchase of machinery or equipment without collateral, which was announced in the Union Budget 2024-25.

The scheme will provide 60% guarantee coverage by National Credit Guarantee Trustee Company (NCGTC) to Member Lending Institutions (MLIs) for credit facility up to Rs 100 crore sanctioned to eligible MSMEs under MCGS-MSME for purchase of equipment / machinery.

The MCGS MSME is expected to facilitate the availability of credit for purchase of Plant and Machinery / Equipment by MSMEs and give a major boost to manufacturing and thereby to Make in India. The scheme will facilitate collateral free loans by banks and financial institutions to MSMEs who are in need of debt capital for their expansion and growth.


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