Minister of MSMEs Shri Nitin Gadkari launched the Credit Guarantee Scheme for Subordinated Debt (CGSSD) which is also called “Distressed Assets Fund–Sub-ordinate Debt for MSMEs”. After completion of necessary formalities including approval of CCEA and consultation with the Finance Ministry, SIDBI and RBI the scheme was formally launched on 24 June by Shri Gadkari from Nagpur.
- As per the Scheme, the guarantee cover worth Rs. 20,000 crores will be provided to the promoters who can take debt from the banks to further invest in their stressed MSMEs as equity.
- This Scheme seeks to extend support to the promoter(s) of the operational MSMEs which are stressed and have become NPA as on 30th April, 2020.
- Promoter(s) of the MSMEs will be given credit equal to 15% of their stake (equity plus debt) or Rs. 75 lakh whichever is lower.
- Promoter(s) in turn will infuse this amount in the MSME unit as equity and thereby enhance the liquidity and maintain debt-equity ratio.