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CREDIT GUARANTEE SCHEME FOR SUBORDINATE DEBT (CGSSD) EXTENDED UPTO 31/03/2022

CREDIT GUARANTEE SCHEME FOR SUBORDINATE DEBT (CGSSD) EXTENDED UPTO 31/03/2022

Context:

In order to keep the avenues of assistance to stressed MSME Units open, the Government had previously decided to extend the program for six months from 31.03.2021 to 30.09.2021. Based on the requests received from the scheme's participants, the Government has decided to continue the extension for a period of six months over 30.09.2021. The scheme will now remain operational until 31.03.2022.

About the Scheme:

  • It was announced by the Finance Minister as part of the Atmanirbhar Bharat Abhiyan.
  • It is also known as “Distressed Assets Fund–Sub-ordinate Debt for MSMEs” as it is a scheme for the distressed MSME sector.
  • The ‘Credit Guarantee Scheme for Subordinate Debt’ was approved by the Government on June 1, 2020 and the program was launched on June 24, 2020 to provide a credit facility through lending institutions to the promoters of stressed MSMEs viz.. SMA-2 and NPA accounts are eligible for reconstruction in accordance with the books of the Lending institutions. The plan was to remain in effect until 31.03.2021.
  • The scheme aims at extending support to the promoter(s) of the operational MSMEs which are stressed and have become NPAs as of 30th April, 2020.
  • According to the Scheme, guarantee cover worth Rs. 20,000 crores will be provided to the promoters who can take debt from the banks to further invest in their stressed MSMEs as equity.
  • It will be operationalised through the Credit Guarantee Fund Trust for MSEs (CGTMSE).

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