The Centre has also decided to include personal loans for business purposes under the scheme
The Centre has relaxed the eligibility criteria for micro, small and medium enterprises under the credit guarantee scheme. The turnover ceiling has been raised to Rs 250 crore from Rs 100 crore, the upper ceiling of loans outstanding increased to Rs 50 crore from Rs 25 crore, and the guaranteed emergency credit line has been hiked to Rs 10 crore from Rs 5 crore, Finance Minister Nirmala Sitharaman and Financial Services Secretary Debashish Panda said on Saturday.
They also said that individual loans for business purposes, provided they fulfill the eligibility criteria, will now come under the credit guarantee scheme.
“After discussions with various industry bodies and stakeholders, and taking into account the headroom under the scheme, we have now decided to provide these criteria. The annual turnover ceiling has been increased in-line with the revised definition of MSMEs,” Panda said at an interaction with media persons in the Finance Ministry.
Sitharaman confirmed that all these changes were within the overall Rs 3 trillion credit guarantee funding ceiling for MSMEs which she had announced in May as part of the Aatmanirbhar Bharat package.
As per the new relaxations, the upper ceiling of loans outstanding as of end-February 2020, to be eligible for the scheme, has been increased to Rs 50 crore. “The maximum amount of credit line funding, which is 20 per cent of the outstanding, will correspondingly increase to Rs 10 crore,” Panda said.
Panda said that as of date, around Rs 1.36 trillion out of the Rs 3 trillion size of the scheme had already been sanctioned by banks, out of which around Rs 88,000 crore had been disbursed.
The Centre has also decided to include personal loans for business purposes under the scheme. ‘If say a working professional wants to buy land or commercial property to start his or her own practice, that will also be included under the credit guarantee scheme,” Sitharaman said.
Speaking on other issues, Sitharaman said that the Centre has sought legal opinion from the office of the Attorney General on the issue of borrowing money from the bond markets to compensate states in lieu of the shortfall in goods and service tax compensation cess.
“There will be a meeting of the GST Council just on the matter of borrowings to make up for compensation shortfall. The legal opinion of the AG and other related matters will be discussed in that meeting,” the Finance Minister said, and added that the date of the next GST Council meeting had not yet been decided.
At the interaction, Panda also gave out the latest data for the Kisan Credit Card Scheme. He said that 11.2 million farmers had been provided the Kisan Credit Cards with a combined credit limit of Rs 90,000 crore.