Govt eases access to funding for MSMEs with changes in one of its key schemes for small businesses
Credit and Finance for MSMEs: The modified guidelines had also extended the last date of claim submission for the half-yearly period ending March 31, 2019, till the end of 2019.
Credit and Finance for MSMEs: According to the revision of guidelines for ‘Interest Subvention Scheme for Incremental Credit to MSMEs 2018’ by the government last year in December, MSMEs registered with Goods and Services Tax (GST) won’t require Udyog Aadhar Number (UAN) for availing the scheme, MSME Minister Nitin Gadkari informed Rajya Sabha on Monday. Small businesses were earlier required to have UAN and GSTN for the same. On the other hand, in the case of MSMEs not registered under GSTN, they can either submit their Permanent Account Number (PAN) or their loan account has to be categorised as MSME by the concerned bank, he added.
The interest subvention scheme was launched with 2 per cent interest subvention for all GST registered MSMEs on fresh and incremental loans. The modified guidelines had also extended the last date of claim submission for the half-yearly period ending March 31, 2019, till the end of 2019. Also, trading activities were made eligible without UAB. These revisions will “lead to the fulfilment of objectives of the scheme, that is, to increase productivity in MSMEs through access to credit at a reduced cost,” Gadkari had said earlier in a statement.
Finance Minister Nirmala Sitharaman last week had announced restructuring of 5.28 lakh MSME loan accounts out of 5.53 lakh MSME accounts, ET Now had tweeted. In a media briefing, the minister had said the rest of restructuring of the MSME accounts will be done by March 15. In her budget speech, the minister had said that over 5 lakh MSMEs have benefited from the restructuring of debt permitted by the RBI in the last year. Bank credit growth to micro and small enterprises (MSE) had remained contracted for December 2019 also in the current financial year, according to the RBI’s bulletin. The contraction in December stood at 0.5 per cent while the bank credit stood at Rs 10.61 lakh crore — 5.7 per cent up from Rs 10.04 lakh crore in the year-ago period.
Source- Financial Express.
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