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MCGS-MSME offers 60% guarantee on credit up to Rs 1 Billion
ECONOMY & POLICY

MCGS-MSME offers 60% guarantee on credit up to Rs 1 Billion

The Mutual Credit Guarantee Scheme for MSMEs (MCGS- MSME) has been launched for providing 60 per cent guarantee coverage by National Credit Guarantee Trustee Company (NCGTC) to Member Lending Institutions (MLIs) for credit facility up to Rs 1 billion sanctioned to eligible MSMEs under MCGS-MSME for purchase of equipment/ machinery. 

The eligibility criteria for borrowers under Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) is as below: 

  • It should be an MSME with valid Udyam Registration Number; 
  • It should not be an NPA with any lender; 
  • Minimum cost of equipment /machinery is 75 per cent of project cost; 
The Scheme is being implemented by National Credit Guarantee Trustee Company Limited (NCGTC), a wholly owned company of Department of Financial Services, Ministry of Finance, Government of India. The MLI shall sanction loans to eligible borrowers and then submit details of the loan account on the portal of NCGTC along with payment of fees, whereupon the MLI shall get a confirmation of loan being guaranteed under the Scheme. 

The Scheduled Commercial Banks (SCBs) / All India Financial Institutions (AIFIs) and Non-Banking Finance Companies (NBFCs), shall be the eligible MLIs under the Scheme, subject to execution of an agreement by them with NCGTC. 

Further, various measures pertaining to direct taxes have been undertaken recently by the government for reducing the compliance burden for smaller businesses and individual tax payers: - 
  • Provisions for presumptive taxation for businesses under Section 44 AD and Section 44 AE of the Income-tax Act, 1961 (the Act). 
  • Provisions for tax audit for businesses under Section 44 AB of the Act. 
  • Provision for reduction in compliance burden by omission of TCS on sale of specified goods under Section 206C of the Act. 
  • Rationalization of tax deducted at source (TDS) rates under various provisions of the Act. 
  • Simplification of the Income-tax Act is proposed. 
The new Income-tax Bill 2025 proposes to make the direct tax provisions concise, lucid, easy to read and understand. Redundant provisions have been eliminated and the drafting style of the new Bill is straightforward and clear. 

This information was given by Minister of State for Finance Pankaj Chaudhary in a written reply to a question in Rajya Sabha today. 

News source: PIB 
                  

The Mutual Credit Guarantee Scheme for MSMEs (MCGS- MSME) has been launched for providing 60 per cent guarantee coverage by National Credit Guarantee Trustee Company (NCGTC) to Member Lending Institutions (MLIs) for credit facility up to Rs 1 billion sanctioned to eligible MSMEs under MCGS-MSME for purchase of equipment/ machinery. The eligibility criteria for borrowers under Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) is as below: It should be an MSME with valid Udyam Registration Number; It should not be an NPA with any lender; Minimum cost of equipment /machinery is 75 per cent of project cost; The Scheme is being implemented by National Credit Guarantee Trustee Company Limited (NCGTC), a wholly owned company of Department of Financial Services, Ministry of Finance, Government of India. The MLI shall sanction loans to eligible borrowers and then submit details of the loan account on the portal of NCGTC along with payment of fees, whereupon the MLI shall get a confirmation of loan being guaranteed under the Scheme. The Scheduled Commercial Banks (SCBs) / All India Financial Institutions (AIFIs) and Non-Banking Finance Companies (NBFCs), shall be the eligible MLIs under the Scheme, subject to execution of an agreement by them with NCGTC. Further, various measures pertaining to direct taxes have been undertaken recently by the government for reducing the compliance burden for smaller businesses and individual tax payers: - Provisions for presumptive taxation for businesses under Section 44 AD and Section 44 AE of the Income-tax Act, 1961 (the Act). Provisions for tax audit for businesses under Section 44 AB of the Act. Provision for reduction in compliance burden by omission of TCS on sale of specified goods under Section 206C of the Act. Rationalization of tax deducted at source (TDS) rates under various provisions of the Act. Simplification of the Income-tax Act is proposed. The new Income-tax Bill 2025 proposes to make the direct tax provisions concise, lucid, easy to read and understand. Redundant provisions have been eliminated and the drafting style of the new Bill is straightforward and clear. This information was given by Minister of State for Finance Pankaj Chaudhary in a written reply to a question in Rajya Sabha today. News source: PIB                   

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