The Government has modified the Mutual Credit Guarantee Scheme to support Micro, Small and Medium Enterprises in line with the Budget 2025-26. The changes aim to enhance credit access and provide incentives to MSME manufacturers and exporters.
The Government has modified the Mutual Credit Guarantee Scheme for MSMEs to improve access to credit for manufacturing and export-orientated units. Under the scheme, National Credit Guarantee Trustee Company Limited provides 60% guarantee coverage to Member Lending Institutions for credit facilities of up to 100 crore rupees sanctioned to eligible MSMEs for the purchase of equipment and machinery.
The Ministry of Finance said the modifications expand coverage, reduce compliance burden and provide targeted incentives for exporter MSMEs.
Under the revised norms, the 5% upfront contribution has been made refundable. One per cent of this amount will be returned each year from the fourth year onwards, subject to satisfactory loan performance. The eligibility criteria have also been expanded to include service sector MSMEs. The minimum project cost requirement towards machinery and equipment has been reduced to 60% from the earlier 75%.
The Ministry said the modifications are expected to increase the availability of credit for MSMEs and provide a boost to manufacturing and exports in the country.
