The government on Thursday said it has introduced credit guarantee fund scheme for small businesses which will provide them with working capital loans from lending institutions.
According to Minister of State (MoS) for Micro, Small and Medium Enterprises (MSME) Giriraj Singh, the scheme will provide term loans up to Rs 1 crore per borrowing unit to small businesses.
The minister informed the Rajya Sabha that the scheme was introduced to mitigate risks involved in disbursing loans to small businesses.
The scheme is being operated by the credit guarantee fund trust for MSME which has been jointly set up by the central government and SIDBI (small industries development bank of India).
Singh said that the government is also implementing various other programmes, including credit linked capital subsidy scheme, performance and credit rating scheme, national manufacturing competitiveness programme, among others, to give a boost to the MSME sector.