The Government has strengthened the Mutual Credit Guarantee Scheme for MSMEs (MCGS–MSME)

The Government has strengthened the Mutual Credit Guarantee Scheme for MSMEs (MCGS–MSME) making credit more accessible, practical, and aligned with real business needs. Launched in 2025 and implemented by the National Credit Guarantee Trustee Company Limited (NCGTC), the scheme continues to provide 60% guarantee coverage on loans up to ₹100 crore for machinery and equipment. But the real impact lies in the recent changes.

What’s new?
Service sector MSMEs are now included
Machinery requirement reduced from 75% → 60% of project cost
5% upfront contribution made refundable (linked to performance)
10-year guarantee tenure introduced

The focus is clear:reduce entry barriers and improve credit access, so that exporter MSMEs get a stronger push.

As highlighted in recent policy updates, exporters now receive targeted benefits to scale globally: Loans up to ₹20 crore

75% guarantee coverage (higher risk support)
Zero guarantee fee in Year 1, then just 0.50%
Lower upfront contribution (2%, partially refundable)
Eligibility linked to consistent export performance.

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