Rs 3 lakh crore collateral-free automatic loan for businesses, MSMEs: Sitharaman

New Delhi: Union Finance Minister Nirmala Sitharaman on Wednesday announced Rs 3 lakh crore collateral-free automatic loans for businesses, including MSMEs.

Sitharaman stated that borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover will be eligible for these. The loans will have a four year tenor with a moratorium of 12 months on principal payment, while interest will be capped, she added.

"100 per cent credit guarantee cover to banks and NBFCs on principal and interest. The scheme can be availed till October 31, 2020. 45 lakh units can resume business activity and safeguard jobs," the Finance Minister said.

Besides this, Sitharaman stated that to provide stressed MSMEs with equity support, the government will facilitate the provision of Rs. 20,000 crore as subordinate debt.

The announcements came a day after Prime Minister Narendra Modi announced a Rs 20 lakh crore special economic package amid nationwide COVID-19 lockdown.

"Prime Minister laid out a comprehensive vision, and that vision was laid out after wide consultations with several sections of the society. Essentially this is to spur growth and to build a very self reliant India and that is why this whole initiative is called Atmanirbhar Bharat Abhiyan," Sitharaman said.

"Five pillars of 'Atmanirbhar Bharat- economy, infrastructure, system, demography and demand. Atmanirbhar (self-reliant) India does not mean India is to be an isolationist country," she added.

She also informed that beginning today, over the next few days she along with the team will address media to put forth Prime Minister's vision.

"We shall not forget that we do have a responsibility towards the poor, needy, the migrant workers, divyang and the aged of the country," Sitharaman said.