Finance Minister Announces 3 Lakh Crore Collateral Free Loans for MSMEs

Nirmala Sitharaman the Finance Minister of India, on the 13th of May, announced collateral free automatic loans for businesses including the Micro, Small and Medium Enterprises (MSMEs) in India,

The money allocated to these small businesses would be up to Rs. 3 lakh crores. The money has been allocated under the financial package of Rs. 20 lakh crores, by Prime Minister Narendra Modi on the night of the 12th of May.

Ms. Sitharaman announced 6 major measures to boost the small businesses in India under the Atma Nirbhar Abhiyan, announced by PM Modi.

Under the measure, borrowers with up to Rs. 25 crores outstanding and Rs. 100 crores turnover would be eligible for the special collateral free loan.

The loan will have a 4 year tenure with moratorium of 12 months on principal repayment and the interest for the loan would be capped.

There will be a 100 % credit guarantee cover to banks and Non-Banking Financial Companies (NBFCs) on principal and interest.

In addition, the initiative to provide free automatic loan would be taken till the 31st of October 2020, without any kind of guarantee fee with fresh collateral

This scheme also allows 45 lakh units to resume business activity and safeguard jobs.

The remaining profits and financial aid for other sectors under the financial package of Rs. 20 lakh crores is yet to be announced in detail.

Meanwhile, the Central Government also announced the lockdown 4.0, as a precautionary measure to contain the spread of the Novel Coronavirus in the Country.

However, the 4th lockdown would come differently with all new sets of rules and guidelines for the citizens of India.

The 4th Lockdown would begin from the 18th of May.

Stay tuned for further updates.

Source: IANS.