40000 cr package msme

Rs 40,000 crore corpus maybe given by govt for lending to MSMEs

• The creation of such a corpus may help absorb potential defaults and will help leverage lending of upto 3 lakh crore to MSMEs, sources explained.
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• MSMEs will be allowed to borrow these funds in addition to the emergency COVID-19 credit line announced by banks(public+privet).

The government is working on making a Rs 40000 cr package MSME to facilate special guaranteed  to the MSME sector to help fight the COVID-19 pandemic led disruption,

It may help to absorb potential defaults and will help leverage lending of upto 3 lakh crore to MSMEs, sources explained.

CNBC-TV18 learns the scheme is likely to run for 6 months from the date of notification and the government will guarantee 100 percent of the additional finance given by lenders for COVID-19 impacted MSMEs.

#CNBCTV18Exclusive | Sources say Govt may announce a Rs 40,000 cr corpus for MSME funding which may help provide for a Rs 3 lakh cr credit line; Govt likely to give 100% guarantee on new funding scheme for MSMEs pic.twitter.com/ZbcFCcefkx

— CNBC-TV18 (@CNBCTV18Live) April 28, 2020

Top bankers told, “MSMEs may be eligible for 20 percent funding of their outstanding limits/term loans from banks, financial institutions and NBFCs under the scheme and the government may provide guarantee through a fund similar to the Credit Guarantee Trust for MSMEs under SIDBI”.

Banks have been suggesting to the government that NBFCs' additional credit lines to MSMEs should also be guaranteed by the government.

The matter is still under discussion and the announcement is likely in the second relief package being worked out by the government, sources said.

MSMEs will be allowed to borrow these funds in addition to the emergency COVID-19 credit line announced by banks.

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