MSMEs Will Get Collateral Free Loans of Upto Rs 100 Cr Through New Credit Assessment Model: FM

Bengaluru: Union Finance and Corporate Minister, Nirmala Sitharaman on Saturday said that Ministry of Micro, Small and Medium Enterprises (MSMEs) will get collateral-free loans of upto Rs 100 crore through a new credit assessment model by PSU banks.

Speaking at National MSME Cluster Outreach Programme in Bengaluru, Sitharaman said that grievances of MSMEs will be solved after introduction of a new credit guarantee scheme which will be introduced in cabinet soon.

" grievance, which has been for a very long time, is that MSMEs get working capital from banks, y don't get term loans, loans for plant and machinery. 

Now, with this guarantee, which was announced in budget, for up to 100 crores, guarantee will be provided, even if you are going to borrow more from banks, for first 100 crores, guarantee will be given. And refore you are going re collateral-free to that extent," she ded. 

Going furr, Union Finance Minister said, “You don't even need a third-party guarantee. No collateral, no third-party guarantee. government gives you guarantee for up to 100 crores.”

She ded that banks will develop a new credit assessment model which will help MSMEs. "Now we have announced in this budget that banks will do credit assessment within mselves. Each bank will have ir own credit assessment model," she said explaining benefit of new assessment system.

Going furr, Union Finance Minister said that e-commerce tre hubs are also being set up with private partnerships which will facilitate international tre and export-related services. She said that 20 industrial clusters will be covered with opening of se six new branches of Small Industries Development Bank of India (SIDBI) and it will help in strengning MSMEs in Karnataka.

She said that SIDBI's branches across Karnataka have an outstanding portfolio of Rs. 1,169 crore with virtually nil NPAs. capabilities of industries not only in Karnataka but whole nation will be strengned due to direct finance facilities of SIDBI, she ded. 

With Agency Inputs