Credit Guarantee Scheme for Subordinate Debt (CGSSD) Lat Date 31 March 2021
DISTRESSED ASSETS FUND - SUBORDINATE DEBT SCHEME FOR MSMEs Credit Guarantee Scheme for Subordinate Debt (CGSSD)
Description:
♦ This scheme seeks to extend support to the promoter (s) of the operational MSMEs which are stressed and have become NPA as on 30th April, 2020;
♦ Promoter (s) in turn will infuse this amount in the MSME unit as equity and thereby increase the liquidity and maintain debt-equity ratio.
Nature of Assistance:
Guarantee for the sub-debt: 90% guarantee coverage would come from the scheme / trust and remaining 10% from the concerned promoter (s); The maximum tenor for repayment will be 10 years. There will be a moratorium of 7 years on payment of principal.
Salient Features:
♦ In a situation, where an outright loan is di? Cult, sub-debt with guarantee will provide the requisite financing to the MSME Units,
♦ Subordinate debt will be of considerable help in sustaining and reviving the MSMEs which have either become NPA or are on the brink of becoming NPA.
♦ Promoter (s) of the MSMEs will be given credit equal to 15% of their stake (equity plus debt) or Rs. 75 lakh whichever is lower.
Expected Impact:
♦ Provision for sub debt will be of Rs. 20000 crores which is likely to benefit two lakh MSMEs;
♦ A bigger number of MSME promoter (s) can do business without worry and avail present opportunities;
♦ With this help, the MSMEs will continue to function, provide jobs and contribute in National Economy.
Who Can Apply
♦ Operational MSMEs which are NPA or are stressed will be eligible Promoter (s) of such units can apply
How to Apply
♦ Promoter (s) of MSMEs meeting the eligibility criteria may approach scheduled commercial banks to avail benefit under the scheme
Download The Guidelines Of Secheme Below Given Link
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