Lok Sabha Question No. 998 (UNSTARRED), answered on 2015-12-04
Subject: Collateral-Free Loans to MSME
Ministry: FINANCE
Asked by: RABINDRA KUMAR JENA, BHAGWANTH KHUBA

## Government of India Ministry of Finance Department of Financial Services

## LOK SABHA UN-STARRED QUESTION NO. 998

## 'COLLATERAL-FREE LOANS TO MSME'

## TO BE ANSWERED ON 4 TH DECEMBER, 2015 / AGRAHAYANA 13, 1937 (SAKA)

998: SHRI RABINDRA KUMAR JENA SHRI BHAGWANTH KHUBA

- (a) whether  the  Government  is  intending  to  introduce  collateral-free  loans  for  Micro,  Small  and Medium Enterprises (MSMEs);

Will the Minister of FINANCE be pleased to state:

- (b) if so the details thereof;
- (d) if so, the details thereof; and
- (c) whether  the  Government  provides  subsidy  on  interest  on  the  loan  being  given  to  MSMEs  for modernization of their machines;
- (e) whether the said subsidy is being provided to enterprise establishments in all areas of the country or limited to the unites related to area and products only and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

- (a) & (b): The Government is implementing the Credit Guarantee Fund Scheme for Micro and Small  Enterprises  (CGTMSE)  to  provide  guarantee  cover  for  collateral  free  credit  facilities extended by member lending institutions to micro and small enterprises (MSEs) on loans up to Rs. 100 lakh per borrowing unit. The Scheme is implemented by the Credit Guarantee Trust for Micro and Small Enterprises through Member Lending Institutions (MLIs) since August, 2000.
- (c) to (e): The following schemes are being implemented to provide subsidised loans to Micro, Small and Medium enterprises (MSMEs) at present:
- I. Credit Linked Capital Subsidy Scheme (CLCSS) - The scheme was launched in the year 2000 for facilitating technology upgradation in specified products/sub-products. Presently, 51 products/sub-products  are  eligible  for  subsidy  under  which  15%  capital  subsidy  subject  to  a ceiling of Rs. 15 lakh with the investment limit of Rs. 1 crore in eligible plant and machinery is extended to MSEs.
- III. Integrated Development of Leather Sector Scheme (IDLSS) - The scheme was launched in the year 2005 and has since been modified to include new units eliogible for investment subsidy to the extent of 30% of cost of plant and machinery for MSME and 20% of plant and machinery for Non-MSME units, subject to a ceiling of Rs. 50 lakh for technology upgradation/modernization and/or expansion of existing units.
- II. Technology Upgradation Fund Scheme for Textile and Jute Industries (TUFS) - The scheme was launched  in  the  year  1999  aims  to  upgrade  and  modernize  the  Indian  textile  industry  by encouraging units to undertake modern technological process.
- IV. Scheme for  Technology  Upgradation/Setting  up/  Modernization/Expansion  of  Food  Processing Industries (FPTUFS) - The scheme was launched in the year 2007 and is aimed at upgrading food processing capabilities of MSMEs. 25% capital investment grant for unit in SMEs sector in general area and 33%  in specified difficult areas like North-East, J&K  and Himachal Pradesh/Uttarakhand etc. with a ceiling of Rs. 50 lakh and 75 lakh respectively.
- V. Technology and Quality Upgradation Support to MSMEs (TEQUP) Scheme - was launched in the year 2012 to focus on enhancing competitiveness of the MSMEs through Energy Efficiency and  Product  Quality  Certification,  reduction  in  emission  of  Green  House  Gas  (GHG)  by  the MSMEs.

All schemes are in operation for the entire country.

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