Lok Sabha Question No. 2386 (UNSTARRED), answered on 2019-07-08
Subject: Collateral Free Loan to MSMEs
Ministry: FINANCE
Asked by: Sujay Radhakrishna Vikhepatil

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UN-STARRED QUESTION NO. 2386 TO BE ANSWERED ON 8 th  JULY, 2019

## 'Collateral Free Loan to MSMEs'

2386 :

DR. SUJAY RADHAKRISHNA VIKHE PATIL :

Will the Minister of FINANCE be pleased to state :

- (a)  whether the Government proposes to introduce collateral-free loans upto Rs.50 lakhs for Micro, Small and Medium Enterprises (MSMEs);
- (b)  if so, the details thereof ;
- (c)  whether  the  Government  provides  subsidy  on  interest  on  the  loan  to  MSMEs  for modernisation of their machines ;
- (d)  if so, the details thereof; and
- (e)  whether the said subsidy is being provided to enterprises/establishments in all areas of the country or limited to the units related to area and products only and if so, the details thereof ?

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

(a) to (b) : As per the extant guidelines of Reserve Bank of India (RBI), Scheduled Commercial Banks (SCBs) have been mandated to extend collateral-free loans up to Rs.10 lakh to units in the Micro and Small Enterprise (MSE) sector.

In  addition,  Micro,  Small  and  Medium  Enterprises  (MSMEs)  can  avail  guarantee under  Credit  Guarantee  Fund  Trust  for  Micro  and  Small  Enterprise  (CGTMSE) scheme  for  loans  up  to  Rs.200  lakh  extended  to  them  without  furnishing  any collateral security.

- (c) to  (e)  :  Government  operates  schemes  like  Credit  Linked  Capital  Subsidy Scheme (CLCSS), Amended Technology Upgradation Fund Scheme (ATUFS), etc. across the country.  These provide capital subsidy on institutional finance availed for upgradation/modernisation of machinery by MSMEs for products/ sectors/segments as specified under the schemes.

On all working capital or term loan (fresh and incremental) to MSME borrowers for loans up to Rs.1 crore, Government has also implemented the 'Interest Subvention Scheme for Micro, Small and Medium Enterprises (MSMEs), 2018' which provides interest  subvention  calculated  at  2%  per  annum.    This  includes  loans  taken  for technology upgradation.

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## Annexure I referred to in reply to Lok Sabha Un-Starred Question no. 1533 for 01.07.2019

## Details of funds allocated under Credit Guarantee Scheme

| S.   | Scheme                                                                          | Ministry                                               | Corpus          | Corpus                |
|------|---------------------------------------------------------------------------------|--------------------------------------------------------|-----------------|-----------------------|
| No   |                                                                                 |                                                        | Date of receipt | Amount (in Rs. crore) |
| 1    | Credit Guarantee Fund for Skill Development [Committed corpus - Rs.1,000 crore) | Ministry of Skill Development and Entrepreneurship     | 31-03-2014      | 490.00                |
|      | Total                                                                           | Total                                                  |                 | 490.00                |
| 2    | Credit Guarantee Fund for Educational Loans [Committed corpus - Rs.3,500 crore) | Ministry of Human Resource (Department of Education)   | 04-04-2015      | 101.09                |
| 2    |                                                                                 | Development Higher                                     | 01-10-2015      | 250.00                |
| 2    |                                                                                 | Development Higher                                     | 01-12-2015      | 112.50                |
| 2    |                                                                                 | Development Higher                                     | 02-04-2016      | 3.27                  |
| 2    |                                                                                 | Development Higher                                     | 22-12-2016      | 112.50                |
| 2    |                                                                                 | Development Higher                                     | 14-02-2016      | 167.36                |
| 2    |                                                                                 | Development Higher                                     | 28-04-2017      | 112.50                |
| 2    |                                                                                 | Development Higher                                     | 01-03-2018      | 112.30                |
| 2    |                                                                                 | Development Higher                                     | 02-03-2018      | 147.50                |
|      | Total                                                                           | Total                                                  |                 | 1119.02               |
| 3    | Credit Guarantee Fund for Micro Units [Committed Corpus-Rs.3,000                | Ministry of Finance (Department Financial Services)    | 29-03-2016      | 500.00                |
| 3    |                                                                                 | of                                                     | 29-08-2016      | 1500.00               |
| 3    | crore]                                                                          | of                                                     | 01-07-2017      | 500.00                |
| 3    |                                                                                 | of                                                     | 12-07-2018      | 300.00                |
| 3    |                                                                                 | of                                                     | 24-08-2018      | 200.00                |
|      | Total                                                                           | Total                                                  |                 | 3000.00               |
| 4    | Credit Guarantee Fund for Stand -                                               | Ministry of Finance (Department of                     | 05-07-2016      | 500.00                |
| 4    | Up India [Committed corpus Rs.5,000 crore]                                      | Financial Services)                                    | 02-07-2017      | 500.00                |
| 4    | Total                                                                           | Total                                                  |                 | 1000.00               |
| 5    | Credit Guarantee Fund for Factoring [Committed corpus -                         | Ministry of Finance (Department of Financial Services) | 31-03-2015      | 250.00                |
| 5    | Rs.500 crore]                                                                   | Ministry of Finance (Department of Financial Services) | 31-03-2016      | 40.00                 |
| 5    |                                                                                 |                                                        | 02-07-2016      | 135.00                |
|      | Total                                                                           | Total                                                  |                 | 425.00                |

* * * * * *

## Annexure II referred to in reply to Lok Sabha Un-Starred Question no. 1533 for 01.07.2019

## States/UTs wise details of subsidy provided under Credit Linked capital Subsidy

Subsidy

| Sl. No.   | State/UT             | 2015-16      | 2015-16                | 2016-17      | 2016-17                | 2017-18      | 2017-18                | 2018-19      | 2018-19                |
|-----------|----------------------|--------------|------------------------|--------------|------------------------|--------------|------------------------|--------------|------------------------|
| Sl. No.   | State/UT             | No. of Units | Subsidy (Amt. in Lakh) | No. of Units | Subsidy (Amt. in Lakh) | No. of Units | Subsidy (Amt. in Lakh) | No. of Units | Subsidy (Amt. in Lakh) |
| 1         | Andman & Nicobar     | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 2         | Andhra Pradesh       | 38           | 394.85                 | 40           | 435.87                 | 46           | 436.88                 | 203          | 1851.96                |
| 3         | Arunanchal Pradesh   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 4         | Assam                | 4            | 32.57                  | 0            | 0.00                   | 0            | 0.00                   | 2            | 21.85                  |
| 5         | Bihar                | 4            | 43.47                  | 1            | 15.00                  | 6            | 46.09                  | 7            | 73.04                  |
| 6         | Chandigarh           | 14           | 57.14                  | 4            | 35.69                  | 3            | 19.33                  | 18           | 93.05                  |
| 7         | Chhatisgarh          | 38           | 321.92                 | 10           | 109.76                 | 8            | 60.12                  | 25           | 237.04                 |
| 8         | Dadra & Nagar Haveli | 8            | 50.33                  | 19           | 145.64                 | 14           | 98.61                  | 47           | 354.67                 |
| 9         | Daman & Diu          | 22           | 126.63                 | 20           | 134.19                 | 15           | 114.33                 | 52           | 439.44                 |
| 10        | Delhi                | 22           | 142.73                 | 10           | 69.45                  | 18           | 140.54                 | 81           | 655.34                 |
| 11        | Goa                  | 2            | 4.27                   | 3            | 26.03                  | 2            | 16.43                  | 12           | 88.39                  |
| 12        | Gujarat              | 2046         | 13073.97               | 1917         | 12084.00               | 1870         | 11937.44               | 7175         | 52028.25               |
| 13        | Haryana              | 314          | 2094.76                | 184          | 1182.32                | 215          | 1453.42                | 656          | 4651.78                |
| 14        | Himachal Pradesh     | 2            | 10.62                  | 3            | 11.40                  | 6            | 41.14                  | 21           | 163.06                 |
| 15        | J&K                  | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 16        | Jharkhand            | 16           | 115.32                 | 6            | 62.84                  | 5            | 21.10                  | 19           | 147.67                 |
| 17        | Karnataka            | 318          | 1763.80                | 189          | 1123.38                | 179          | 975.15                 | 580          | 3280.55                |
| 18        | Kerala               | 20           | 119.59                 | 12           | 92.27                  | 11           | 69.08                  | 32           | 174.81                 |
| 19        | Lakshdweep           | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 20        | Madhya Pradesh       | 31           | 228.12                 | 20           | 143.58                 | 25           | 255.04                 | 93           | 816.64                 |
| 21        | Maharashtra          | 976          | 5869.40                | 682          | 4272.04                | 593          | 3620.05                | 2203         | 13583.10               |
| 22        | Manipur              | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 23        | Meghalaya            | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 24        | Mizoram              | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 25        | Nagaland             | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 26        | Odisha               | 7            | 62.44                  | 5            | 39.89                  | 11           | 86.84                  | 29           | 218.84                 |
| 27        | Pudduchery           | 0            | 0.00                   | 1            | 10.23                  | 2            | 14.97                  | 0            | 0.00                   |
| 28        | Punjab               | 447          | 2534.73                | 332          | 1596.30                | 365          | 1644.57                | 1195         | 6167.12                |
| 29        | Rajasthan            | 240          | 1718.73                | 195          | 1405.88                | 220          | 1514.72                | 590          | 4348.29                |
| 30        | Sikkim               | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   | 0            | 0.00                   |
| 31        | Tamilnadu            | 228          | 1460.39                | 164          | 969.55                 | 239          | 1676.07                | 552          | 3539.24                |
| 32        | Telangana            | 80           | 722.15                 | 65           | 587.06                 | 91           | 735.17                 | 176          | 1656.61                |
| 33        | Tripura              | 0            | 0.00                   | 0            | 0.00                   | 1            | 11.49                  | 0            | 0.00                   |
| 34        | Uttar Pradesh        | 129          | 964.77                 | 103          | 822.26                 | 109          | 822.85                 | 271          | 2216.00                |
| 35        | Uttarakhand          | 14           | 92.94                  | 7            | 77.61                  | 10           | 85.48                  | 37           | 415.37                 |
| 36        | West Bengal          | 27           | 237.84                 | 19           | 200.81                 | 17           | 157.22                 | 79           | 821.94                 |
|           | Total                | 5047         | 32243.47               | 4011         | 25653.06               | 4081         | 26054.16               | 14155        | 98044.05               |

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