As part of a stimulus package for the coronavirus-hit economy, the government is working on a credit guarantee scheme to enable banks to provide additional 10-15 per cent working capital to MSMEs for payment of wages, sources said.
Currently, banks are offering an extra line of credit of 10 per cent based on working capital limits, which the government intends to increase further.
Since units are closed due to lockdown and there has been no operation for the past two months, most micro, small and medium enterprises (MSMEs) do not have money for paying wages and financial assistance for them is under consideration of the government, the sources said.
One of the proposals under consideration is to provide 10-15 per cent additional line of credit by banks over the working capital limit of the MSME sector, which is the largest employer in the country after agriculture.
This loan, especially for wage payment, will be backed by a proposed credit guarantee fund so that lenders' money is ...