FM Nirmala Sitharaman announces Rs 3 lakh crore collateral-free loans for MSMEs

New Delhi : Finance Minister Nirmala Sitharaman  on Wednesday announced collateral-free loans worth Rs 3 lakh crore for MSMEs with turnover up to Rs 100 crore till October 31, 2020, as part of the Rs 20 lakh crore package announced by Prime Minister Narendra Modi on Tuesday.

A total of 45 lakh MSME units will be benefited with the ,  Sitharaman claimed while addressing the media here this afternoon.

MSME collateral free loans will be 100 per cent credit-free and the moratorium will be for first 12 months, Finance Minister said.

The Centre has decided to review the definition of micro, small and medium enterprises (MSME) and announced increase of investment limits.

As per the new changes, businesses with investment of less than Rs 1 crore and turnover of Rs 5 crore would be classified as micro enterprises. Under the existing criteria, a company with investment of less than Rs 25 lakh in the manufacturing sector and less than Rs 10 lakh in the services sector were considered micro enterprises.

The investment limit of small enterprises has been increased to Rs 10 crore, and the companies would have to have turnover of less than Rs 50 crore.

Further, the investment limit for medium enterprises has been increased to Rs 20 crore and the turnover limit has been kept at Rs 100 crore.

Sitharaman said that the necessary amendments to laws will be brought about to give effect to the changes.

45 lakh MSMEs to benefit via Rs 3 lakh crore loans