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T.N. launches credit guarantee scheme for MSMEs

Scheme facilitates generation of end-to-end credit score

August 26, 2022 01:00 am | Updated 01:00 am IST - COIMBATORE

Chief Minister M.K. Stalin on Thursday launched Tamil Nadu Credit Guarantee Scheme (TNCGS) and Tamil Nadu Trade Receivables Discounting System (TN TReDS) for Micro, Small and Medium Enterprises (MSMEs).

The TNCGS will operate with the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) of the Union government and extend 90% guarantee for eligible loans up to ₹40 lakh. For loans above ₹40 lakh and less than ₹2 crore, eligible loans will get 80% guarantee.

The State government has made an allocation of ₹100 crore for this scheme. The scheme facilitates generation of end-to-end credit score, taking into account financial parameters beyond the credit “behaviour-based scores”, a press release said.

V. Arun Roy, MSME Secretary, told The Hindu that the scheme, which reduces the need for collateral for MSMEs to get loans, will be available initially for MSME customers of TAICO and TIIC.

In a fortnight, at least three nationalised banks will offer loans to MSMEs under this scheme.

The MSMEs face issues related to delayed payments for supplies made to larger companies. In order to address this, an ERP platform has been created and all Tamil Nadu PSUs, statutory boards, corporations and apex cooperatives will be on it. If the State entity does not make payment to the MSMEs, which are on the TReDS platform till the 179th day, on the 180th day, TAICO Bank will pay the dues for the bills uploaded on TN TReDS, the release said.

Further, on Thursday, the MSME Trade and Investment Promotion Bureau, which has been branded as ‘FaMe TN’, exchanged MoUs with Open Network for Digital Commerce, Institute of Chartered Accountants of India, and World Resource Institute.

Mr. Stalin also inaugurated Tamil Nadu Coir Business Development Corporation, which will be located in Coimbatore. The Corporation, which has been incorporated within five months of its announcement, will focus on establishing new coir clusters, create linkages with international customers, set up research and development centres, and develop industry-academia linkages.

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