The government has taken a big decision for lakhs of small and medium businessmen of the country. Now MSME sector workers will be able to get cheap and hassle-free loans. In order to easily provide cheap loans to small and medium enterprises (MSME), the Reserve Bank has advised banks to link MSME loans to external benchmarks.
The government gave this update in Parliament. It was told that the interest rate of loans linked to external benchmark will be reset every three months, due to which the benefit of change in interest rates will be available immediately. Old borrowers will also get a chance to shift to the new system with mutual consent. This means that old businessmen will be able to easily adopt the new system and benefit from it.
To ensure that there is no impact on domestic production, special reliefs have been given to MSMEs in the Quality Control Order (QCO). Micro enterprises have got additional extension of six months and small enterprises have got additional extension of three months. The government has also given relaxation in limited import of raw materials for export, research and development (R&D) and clearance of old stock. Micro, small and medium enterprises are getting huge concessions in BIS fees.
Apart from this, Mutual Credit Guarantee Scheme has been launched for MSMEs, which will now make it easier to avail loans for purchasing machinery and equipment. Micro and small units will not have to provide any collateral for loans up to Rs 10 lakh. The government claims that these steps will provide huge financial relief to MSMEs and their business will become stronger.
