SME Times is powered by   
Search News
Just in:   • President roots for lower, acceptable, stable interest rate  • Textiles Minister asks ATIRA to devise a scheme for benefit of SMEs  • Trump sworn-in; Modi, Mukherjee congratulate new Prez of US  • MSME Ministry signs MoU with IORA member countries  • China GDP falls to 26-year low 
Last updated: 02 Jan, 2017  

Narendra Modi THMB PM doubles credit guarantee limit for MSMEs to Rs. 2 cr

   Top Stories
» President roots for lower, acceptable, stable interest rate
» Textiles Minister asks ATIRA to devise a scheme for benefit of SMEs
» Trump sworn-in; Modi, Mukherjee congratulate new Prez of US
» MSME Ministry signs MoU with IORA member countries
» 'India can boost exports by $5.5 bn by cutting trade costs'
SME Times News Bureau | 02 Jan, 2017
Prime Minister Narendra Modi on Saturday announced the enhancement of credit guarantee scheme for micro, small and medium enterprises (MSME) for loans up to Rs 2 crore.

"Just as agriculture is vital for the economy, so are the medium and small scale enterprises also called the MSME sector.

"Government has taken some decisions in the interest of small and medium businesses, which will also boost employment," he said in an address to the nation on New Year's Eve.

Noting that the central government underwrites loans given by banks to small businesses through a trust, he said that loans were covered up to one crore rupees and this limit was now being doubled.

"Earlier the scheme only covered bank loans. Hereafter it will cover loans given by NBFCs (Non-Banking Financial Companies) as well. This decision will enable better access to credit for small shop-owners and small enterprises.

"Banks and NBFCs will not levy high interest on these loans, as Government of India is bearing the cost of underwriting them," he said, adding banks to raise the credit limit for small industry from 20 per cent of turnover to 25 per cent.

"Many people connected with this sector have made cash deposits in the last few weeks. Banks have been asked to take this into account when deciding on working capital."

He said that a few days back, the government had announced a major tax relief for small businesses.

"Income of businesses with turnover of up to Rs 2 crores was calculated at 8 per cent of the turnover. Now, for such businesses income from digital transactions will be calculated at 6 per cent. This will effectively reduce their tax liability by 25 per cent," he said.

He also said that progress of the MUDRA (credit guarantee fund for micro units development refinance agency) Yojana has been "very encouraging".
Print the Page Add to Favorite
Share this on :

Please comment on this story:
Subject :
(Maximum 1500 characters)  Characters left 1500
Your name:

Credit gaurantee scheme
Syed ibrahim r | Wed Jan 4 17:43:33 2017
Sir, I am very much thankful to modiji for this consideration to increase the limit to two crores. But their must be monetoring body to whom refusal by banks to genuine customers can be reported. Even now the banks insist upon the collateral security ,rather than the gaurantee scheme. What and where it should be brought up for consideration of this matter?

Credit Guarantee Limit increase
seenuvasan | Wed Jan 4 05:39:08 2017
It's a great and welcome move by PM Modi Ji. This kind of announcement must be taken care by the Bankers/NBFC because the right to sanction these limits are by higher official those who are not aware much of MSME's potential which Mr.Modi like PM's only know and also the sanction takes quite longtime.This announcement should be practically implemented.

Working capital requirements is much more than 30% of revenues
Bhagawath Prasad | Mon Jan 2 07:25:18 2017
I truly appreciate the efforts being made to ease funding requirement for MSMEs , though it was welcome move by our respected PM , to increase working capital limits to 30% , in reality the requirement for certain goods cum service related sectors is more than that , all of us are aware that bigger companies gets their job done on mail confirmations and issue POs at later date at their comfort ( usually 3 to 4 months ) thereby the MSE requirement is much more than 30% I would request ministry to look into the ground realities of SMEs and their better growth.Secondly ,CIBIL is biggest hurdle for SME s. 60% of applications for funding will get dropped as banks don't have ability to see merits behind bad scorings.this is another area that ministry must look into it seriously and give alternate methods to study character of companies.

  Customs Exchange Rates
Currency Import Export
US Dollar
UK Pound
Japanese Yen 58.75 56.85
As on 21 Jan, 2017
  Daily Poll
Do you see a corporate tax cut in coming Budget?
 Can't say
  Commented Stories
» Reforms hold key to growth(19)
» Starting an import export business: Basic guide for beginners(4)
» 'Worse is yet to come'; Manmohan takes on Modi(3)
» Will India and China fight a war again?(1)
» Govt mulls 'Online Udyog Aadhaar Form' to ease SME registration(1)
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter