Credit and Finance for MSMEs: Around nine months right after the Modi government launched the Rs 20,000-crore subordinate debt scheme for stressed MSMEs, the quantity of beneficiaries as of March 4, 2021, stood at only 332 involving an quantity of Rs 38.5 crore, up from 272 loans amounting to Rs 30.84 crore as of February 4, 2021. The information was shared by MSME Minister Nitin Gadkari in a written reply to a query in the Rajya Sabha on Friday. The scheme was launched by the government in June 2020 and operationalized in August to help 2 lakh Covid-hit MSMEs that are non-performing assets (NPAs) or stressed. The scheme was aspect of the Rs 3.7-lakh-crore MSME package beneath the Rs 20-lakh-crore stimulus package announced by the government final year.
MSMEs in Tamil Nadu had secured maximum guarantees (53) involving Rs 555.42 crore followed by Punjab (39) involving Rs 339.98 crore, Maharashtra with 32 guarantees worth Rs 385.06 crore, Madhya Pradesh with 30 guarantees worth Rs 330.29 crore, Karnataka with 26 guarantees involving Rs 516.87 crore and more, according to the information from the Credit Guarantee Trust for Micro and Small Enterprises.
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According to the scheme, stressed or NPA MSME accounts as of April 30, 2020, are eligible to raise credit equivalent to 15 per cent of their stake (equity plus debt) in the small business or Rs 75 lakh whichever is reduce. Promoters of the companies are also necessary to invest the debt raised in the small business as equity to increase liquidity and keep the debt-equity ratio. While 90 per cent of the assure coverage comes from the scheme, the remaining 10 per cent has to be contributed by promoters of the MSME. The scheme presented a 7-year moratorium for eligible accounts for paying the principal quantity whilst the maximum period for repayment was 10 years.
Among the higher NPA threat sectors identified by the majority of bankers in the FICCI-IBA Bankers’ Survey July-December, 2020 survey had been tourism and hospitality, MSME, aviation, and restaurants. 84 per cent respondents anticipated an improve in MSME NPAs in the initial half of 2021 whilst 89 per cent respondents anticipated the identical in the restaurant sector. RBI in its second bi-month-to-month policy meeting on August 6, 2020, had extended the provision of a one-time restructuring scheme for MSMEs without the need of downgrade on asset high quality till December 2020.