The Mutual Credit Guarantee Scheme for MSMEs has received approval from central government

Current Context: The Mutual Credit Guarantee Scheme for MSMEs approved on January 29, 2025, is designed to support small and medium-sized enterprises (MSMEs) in India. 

Here are the key details:

• Guarantee Coverage: The scheme provides a 60% guarantee coverage for loans, which means that if an MSME is unable to repay a loan, 60% of the loan amount is guaranteed by the scheme, reducing the risk for lenders.
• Loan Limit: The scheme covers loans up to Rs 100 crore, specifically for MSMEs to purchase plant and machinery. This helps MSMEs expand their manufacturing capabilities and improve productivity.
• Make in India: The scheme aligns with the Make in India initiative by encouraging MSMEs to invest in local manufacturing and reduce dependency on imports.

Question:

1. What percentage of loan guarantee coverage is provided under the Mutual Credit Guarantee Scheme for MSMEs approved on January 29, 2025?

• A) 50%
• B) 40%
• C) 60%
• D) 80%

Answer: C) The scheme provides a 60% guarantee coverage for loans, which means that if an MSME is unable to repay a loan, 60% of the loan amount is guaranteed by the scheme, reducing the risk for lenders.