The Hindu · India ·

India modifies MSME credit guarantee scheme with capped coverage

→Guarantee limits impose financing constraints

Manufacturing Financial Services
Change
India capped MSME guarantee loans at ₹20 crore with 75% coverage and limited guarantee duration to 10 years.
Why it matters
The revision replaces open-ended guarantees with fixed-term coverage, increasing financing exposure for lenders and borrowers.
Implications
  • → Borrowers face higher upfront costs — financing burden increases
  • → Lenders carry residual risk — credit conditions tighten

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The Hindu
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