India modifies MSME credit guarantee scheme with capped coverage

Guarantee limits impose financing constraints

Manufacturing Financial Services
The Hindu ·
Change
India capped MSME guarantee loans at ₹20 crore with 75% coverage and limited guarantee duration to 10 years.
Why it matters
The revision replaces open-ended guarantees with fixed-term coverage, increasing financing exposure for lenders and borrowers.
Implications
  • — Borrowers face higher upfront costs — financing burden increases
  • — Lenders carry residual risk — credit conditions tighten

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Source
The Hindu
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