Bhopal: Madhya Pradesh Chief Minister Dr. Mohan Yadav has welcomed the Union Cabinet’s decision to continue the Credit Guarantee Fund for Micro Units until March 31, 2031, and approve a ₹5,000-crore corpus, saying the measures will support the financial growth of small industries.
The decisions were taken at a Union Cabinet meeting chaired by Prime Minister Narendra Modi.
Yadav thanked the Prime Minister for the measures, describing them as supportive of the interests of small industries and entrepreneurs.
According to the Chief Minister, extending the credit guarantee fund for another five years will help facilitate the availability of loans under the Pradhan Mantri Mudra Yojana (PMMY).
He also welcomed the decision to reduce the annual guarantee fee from 1% to 0.75%, stating that the lower charge would provide further assistance to small entrepreneurs.
Credit Support for Micro Enterprises
The continuation of the credit guarantee fund and the approval of the additional corpus are aimed at strengthening credit support for micro units.
The reduced annual guarantee fee is another measure highlighted by the Chief Minister as beneficial to small businesses seeking financial assistance.
Yadav said these decisions would help promote the economic progress of small industries over the coming years.
What Is the Credit Guarantee Scheme for Micro Units?
The Credit Guarantee Scheme for Micro Units is designed to improve access to institutional credit for micro enterprises by providing a guarantee cover to lending institutions against eligible loans. It helps reduce the lending risk for banks and other financial institutions, making it easier for small businesses to obtain loans without having to provide extensive collateral.
The scheme supports micro entrepreneurs who need funds to establish, expand or strengthen their businesses. By providing a credit guarantee to lenders, it encourages financial institutions to extend credit to smaller enterprises that may otherwise face difficulties in securing loans.
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