Assam Govt Launched Assam Credit Guarantee Scheme for MSEs

GUWAHATI: The Assam Government has launched the Assam Credit Guarantee Scheme, which will securitize financing for the state's medium and small companies. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is jointly set up by Ministry of Micro, Small & Medium Enterprises (MSME), Govt of India, will provide 75% - 85% of the guarantee coverage for loan facilities under the Scheme, based on the borrower's category and balance.

The Government of Assam will give 25% - 15% coverage, bringing the total guarantee coverage to 100%. Claims of the respective MLI shall be settled up to a maximum of 10% NPA of the crystallised portfolio (the portfolio will be crystallised every fiscal year). In the event that the NPA level exceeds the stated limit, CGTMSE will honour its part, which is 75%-85%.

In 2022, Assam Government signed two Memorandums of Understanding (MoUs) with CGTMSE for the Assam Credit Guarantee Scheme and SIDBI Venture Capital for the Assam Startup Venture Capital Fund in order to allow rapid industrialization and revitalise the Micro, Small, and Medium Enterprises (MSME) sector.

Assam Chief Minister Himanta Biswa Sarma signed the agreement at an MSME conclave, stating that the cooperation with CGTMSE is meant to provide extra guarantee coverage for loans made by lending institutions to MSMEs in Assam.

Meanwhile, the Scheme goes into effect on April 1, 2023. All existing MLIS will be eligible for ACGS. Apart from the 100% guarantee coverage, all other terms and conditions of the Credit Guarantee Schemes (CGSI for banks and CGS - II for NBFCs) will apply to ACGS, mutatis mutandis.

This project will aid in satisfying the financial needs of MSES in Assam.

Meanwhile, the CM stated that another Memorandum of Understanding (MOU) inked with SIDBI Venture Capital Fund (SVCL) intended to function as an investment manager for the proposed Assam Start-up Venture Capital Fund.

Sarma described the signing of this deal as a "red letter day," adding that "the MoUs are expected to facilitate rapid industrialization and revamp the MSME sector." The Assam Start-up Venture Fund, with a total corpus of Rs 200 crore, would also be established by SVCL.

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