Credit and Finance for MSMEs: Department of Animal Husbandry & Dairying (DAHD) under the Ministry of Fisheries, Animal Husbandry and Dairying on Thursday announced the launch of a new credit guarantee scheme. The scheme under the Animal Husbandry Infrastructure Development Fund (AHIDF) aims to facilitate collateral-free credit for MSMEs in the livestock sector.
To operationalize the scheme, DAHD said it has set up a credit guarantee fund trust of Rs 750 crores for credit guarantee coverage of up to 25 per cent of loans disbursed to MSMEs by eligible banks and other lending institutions.
“The credit guarantee scheme facilitates access to finance for the un-served and under-served livestock sector, making the availability of financial assistance from lenders to mainly first-generation entrepreneurs and underprivileged section of society, who lack collateral security for supporting their ventures,” the ministry said in a statement.
The primary aim of the scheme is for the lender to focus on project viability and secure the credit facility only based on the primary security of the assets financed.
The set-up of the credit guarantee fund trust was approved under the Rs 15,000-crore AHIDF under Prime Minister’s Atmanirbhar Bharat Abhiyan stimulus package. The aim was to incentivize investments by entrepreneurs, private firms, MSMEs, farmers’ producers organizations (FPOs) and Section 8 companies to establish dairy processing and value addition infrastructure; meat processing and value addition infrastructure; animal feed plant; breed improvement technology and breed multiplication farm; etc.
The ministry said that the credit guarantee portal has been developed as a rule-based B2B portal and implemented the enrollment of eligible lending institutions under the credit guarantee scheme, issuance/renewal of credit guarantee cover and settlement of claims.
“The initiative of credit guarantee scheme taken by DAHD is expected to greatly increase the participation of MSMEs engaged in the livestock sector leading to increased flow of credit to the sector and strengthen the MSMEs to boost the overall rural economy through strengthening the livestock sector which is of one of the most potential sector seeking development,” it said.