Government on Wednesday approved a package for supporting the micro and small enterprises across the country, which entails augmenting the corpus of Credit Guarantee Trust Fund (CGTF) for such ventures and doubling the coverage of loans under the credit guarantee scheme.
The post-facto approval was granted at a meeting of the Union Cabinet chaired by PM Narendra Modi here.Under the package, the corpus of the CGTF has been enhanced from Rs 2,500 crore at present to Rs7,500 crore, which will be fully funded by the Govt.
Moreover, coverage of the loans under the CGFT has been increased from Rs1 crore to Rs2 crore. Further, coverage of the CGFT for loans being extended to micro and small enterprises by NBFCs has also been increased. Augmentation of the corpus would facilitate larger flow of credit to micro and small enterprises. This in turn, would lead to increased output and employment and thereby promote equity and inclusiveness.
“As the scheme provides credit without collateral and third-party guarantee, the start-ups would be encouraged to set up enterprises based on innovation and new ideas. Every operation is online and therefore, the system ensures public accountability,” an official said.