Smt. Nirmala Sitharaman, the Hon'ble Finance Minister, announced details of the 20 lakhs crore Financial Aid package on 13.05.2020 called Atmanirbhar Bharat to support MSMEs in India.
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Collateral Free Loans
Collateral free loans amounting to INR 3 lakhs crore have been announced. The eligibility criteria for this is that the borrower should have less than INR 25 crore outstanding and turnover of INR 100 crore. The tenure of the loan would be 4-years with 12-months moratorium on Principal repayment. 100% credit guarantee cover will also be given to Banks and NBFCs on principal and interest. This scheme can be availed till October 31st,2020. It is expected around 45 lakh units will benefit from this.
Support for Stressed MSMEs
Subordinate debt amounting to INR 20,000 crore would be provided to MSMEs that are stressed or NPA. The debt will be given to promoters of MSMEs to infuse the debt amount as equity into the unit. A support of INR 4,000 crore will also be provided to CGTMSE, which will further provide partial Credit Guarantee Support to Banks. An estimated 2 lakh units will benefit from this.
Equity Infusion into MSMEs
This scheme is for MSMEs that have viability and growth potential but face shortage of equity. FoF will be set up with corpus of INR 10,000 crores. This shall be operated through a Mother Fund and few daughter funds. This is expected to leverage around INR 50,000 crore of funds at daughter fund level.
Revised MSME Classification
Changes have been made to MSME definition to benefit more enterprises.
Reference: I have collated the above slides from the Government of India presentation for quick reference.