Now Small Companies can’t say we do not have money to Pay
It will be easy to give salary to small companies, government is considering the credit guarantee scheme
According to sources, since these small companies are closed due to lockdown and no work has been done for the last two months. In such a situation, small companies (MSMEs) do not have money to pay salary. The government is considering giving them financial assistance.
The government is working on a loan guarantee scheme under a special package for the economy affected by Coronavirus. With this, banks will be able to provide 10 to 15 percent extra working capital for giving salary to MSME sector. According to the news of PTI, currently banks are offering 10 percent extra loan facility based on such capital limit. Now the government has plans to increase it further.
According to sources, since these small companies are closed due to lockdown and no work has been done for the last two months. In such a situation, small companies (MSMEs) do not have money to pay salary. The government is considering giving them financial assistance.
One of these proposals is to provide additional loan facility of 10 to 15 percent of the working capital limit on behalf of banks, which is under consideration. After agriculture, the MSME sector employs the largest number of people.
According to sources, this loan will be mainly for paying salary and it will be guaranteed through the proposed loan guarantee fund. With this, the money of the banks will be safe in case of default by any borrower.
The MSME sector contributes more than 28 percent of the country’s GDP (GDP) while the contribution to exports is more than 40 percent. Not only this, 11 crore people have got employment in this area. Public sector banks have given loans of Rs 42,000 crore to small companies since the ‘lockdown’. These loans were given under Kovid-19 emergency facility. The purpose of this is to provide the necessary cash to MSMEs to remain in work.
After the closure from March 25 in the country, public sector banks started the facility of Kovid-19 emergency loan. Under this, a top-up loan of 10 percent of the working capital limit is given. The maximum limit of loan is Rs 2,00 crore. According to the data available with the government, so far banks have given loans of Rs 27,426 crore to MSMEs.
Apart from this, big companies have taken a loan of Rs 14,735 crore. Based on the numbers, about 10 lakh MSMEs and 6,428 companies have taken advantage of this so far. Also, many MSMEs and companies have also taken advantage of the three-month deferment as per the Reserve Bank guidelines.
