REGULATORY · COMPETITIVE · INDIA
Government modifies Mutual Credit Guarantee Scheme
Change
Finance Ministry revises the Mutual Credit Guarantee Scheme to change guarantee terms, eligibility, and upfront contributions for MSME equipment loans.
Why it matters
Guarantees under the scheme now expire after 10 years, equipment cost cover is capped at 60% of project cost, and a 2% upfront contribution (refundable in tranches after year 4) is required. Eligibility is restricted to profitable units that exported at least 25% of sales in each of the prior three years, raising borrower contribution requirements and limiting access for newer or non-exporting MSMEs.
Implications · Who is affected · What to watch
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Topics
Regulatory & Compliance Policy & Regulation Compliance Banking Regulation Finance & Banking Financial Services