What Changes Did the Maha Cabinet Approve for Loan Guarantors?
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Synopsis
In a significant move, the Maharashtra Cabinet has revised loan guarantor conditions, making it easier for small entrepreneurs to secure funding. With a five-year government guarantee extension, the cabinet aims to expedite loan processing and encourage new beneficiaries to participate in various schemes.
Key Takeaways
- Maharashtra Cabinet revises loan guarantor conditions.
- One guarantor is now sufficient for loans between Rs 2 lakh and Rs 5 lakh.
- Extension of government guarantee for five years.
- Aim to facilitate loan access for small entrepreneurs.
- Support for clearing pending loan applications.
Mumbai, Aug 12 (NationPress) The Maharashtra Cabinet, led by Chief Minister Devendra Fadnavis, has officially sanctioned revisions to the guarantor conditions for loan applications across several initiatives by the Mahatma Phule Backward Classes Development Corporation, Sant Rohidas Leather Industries and Leather Workers Development Corporation, and Sahitya Ratna Lokshahir Anna Bhau Sathe Development Corporation.
Additionally, the cabinet has approved a five-year extension of the government guarantee for these corporations.
This move aims to streamline the loan acquisition process for small business owners and expedite the resolution of outstanding cases. These corporations operate various programs, including term loans, seed capital initiatives, and loan schemes under both their own umbrellas and the National Corporation.
For loans up to Rs 2 lakh, there is now an allowance to encumber the assets of the beneficiaries or the real estate of a single guarantor.
Previously, loans ranging from Rs 2 lakh to Rs 5 lakh required two guarantors, but this has been revised to permit just one.
The new stipulations state that the guarantor must possess immovable property in their name or be employed in the private sector or within government, semi-government, or government-supported institutions.
Moreover, both the beneficiaries' and guarantors' immovable properties will be encumbered.
Programs from the National Scheduled Caste Backward Classes Financial Development Corporation (NSCFDC) and the National Safai Karamcharis Financial Development Corporation (NSKFDC) are also managed through these state corporations.
Loans from the national corporation are allocated to state corporations to facilitate various schemes, including term loans, seed capital, microfinance, and educational loans, as stated in the release.
To support these initiatives, the government has allocated a guarantee of Rs 600 crore to the Mahatma Phule Backward Classes Development Corporation, Rs 100 crore to the Sahitya Ratna Lokshahir Anna Bhau Sathe Development Corporation, and Rs 50 crore to the Sant Rohidas Leather Industries and Leather Workers Development Corporation over a five-year span. This will help clear pending loan applications and enable new beneficiaries to access funds.
Point of View
This decision by the Maharashtra Cabinet underscores a commitment to enhancing financial accessibility for small businesses. By adjusting the guarantor requirements, the government is taking a proactive stance in fostering entrepreneurship and economic growth, which is vital for India's overall development.
NationPress
03/09/2025
Frequently Asked Questions
What are the new guarantor conditions for loans?
The new conditions allow for one guarantor instead of two for loans between Rs 2 lakh and Rs 5 lakh, and beneficiaries can now encumber their property or that of a single guarantor.
How will the changes benefit small entrepreneurs?
These changes aim to simplify the loan application process, making it easier for small business owners to secure funding and resolve pending loan cases.
What is the duration of the government guarantee?
The government guarantee has been extended for five years to support these loan schemes.
