Mutual Credit Guarantee Scheme for MSMEs MCGS-MSME
A 60% government guarantee on bank loans up to ₹100 crore that MSMEs take to buy plant, machinery or equipment, with better terms for established exporters.
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- Cost to apply
- Upfront contribution of 5% of the loan (2% for exporters), partly refundable, plus guarantee fees set by NCGTC
- Status
- Open
- Run by
- National Credit Guarantee Trustee Company (NCGTC), Department of Financial Services
What you get
- 60% guarantee cover on loans up to ₹100 crore for buying equipment or machinery
- The 5% upfront contribution is refundable at 1% a year from the fourth year if the loan account performs well
- Machinery or equipment need only be 60% of project cost, down from 75%
- Exporters get 75% cover on loans up to ₹20 crore, upfront contribution of 2% (maximum ₹40 lakh) refundable in the fourth and fifth years, no guarantee fee in the first year and 0.50% a year after that
Who can apply
- Open to businesses in manufacturing and services.
- Micro, small and medium enterprises.
- The most on offer is ₹100 crore.
- Udyam registration is needed. It is free.
- Service sector MSMEs were added in the March 2026 changes
- Exporter terms need a profitable unit that exported at least 25% of sales in each of the previous three years and meets export realisation conditions
- Guarantee expires after 10 years
Where to apply
In person, apply through a member bank or financial institution
In Kerala, through member banks and lenders in Kerala
Worth knowing
Launched January 2025, modified 21 March 2026.
Where we found this
- PIB, Government modifies Mutual Credit Guarantee Scheme, 21 March 2026 (external site) Official announcement
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