Business/MSMEs have been badly hit due to Covid-19 need addition funding to meet operational liabilities built up, buy raw material and restart business, therefore, in this regard, the Govt. has proposed Rs. 3 lakh crores Collateral-free Automatic Loans for Business, including MSMEs. An emergency credit line has been allowed to business/MSMEs from banks and NBFCs up to 20% of their entire outstanding credit as on 29.2.2020. In order to curb the marketing and liquidity problems, Govt. aims to promote e- market linkage for MSMEs which would act as a replacement for trade fairs and exhibitions. The Finance Minister also made major announcement that MSMEs receivable from Govt. and CPSEs shall be released in 45 days. In order to protect the MSMEs from unfair competition from foreign companies, the Govt. has decided to take a major step towards Self-reliant India by disallowing Government procurement tenders up 200 crores for foreign Companies, this step would give major boost to medium enterprises in India which faces tough competition at hands of foreign players.
Eligibility: Borrowers having outstanding up to Rs. 25 Crores and turnover of Rs. 100 crores are eligible to take benefit.
Tenure: The tenure of the loan would be 4 years with moratorium of 12 months on Principal repayment.
100% credit guarantee: There will be 100% credit guarantee cover to Banks and NBFCs on principal and interest.
Validity: This scheme can be availed till Oct 31, 2020
No fresh collateral: It has been clearly specified that there would not be any guarantee fee or fresh collateral requirement for availing benefit under the scheme.