Union Finance Minister Nirmala Sitharaman on June 28 announced eight economic relief measures including Rs 1.1 lakh crores credit guarantee scheme for Covid-affected areas. Sitharaman said, “We are announcing about eight economic relief measures, of which four are absolutely new and one is specific to health infrastructure.

For Covid-affected areas, Rs 1.1 lakh crores credit guarantee scheme and Rs 50,000 crores for the health sector. She further said, “Under Credit Guarantee Scheme, which is a new scheme, 25 lakh people to be benefitted through it. Loan will be given to the smallest borrowers by Microfinance Institutions. A maximum Rs 1.25 lakhs amount will be lent to an individual. The focus is on new lending and not on repayment of old loans.

The interest rate under the new Credit Guarantee Scheme is 2% below RBI prescribed rate, with a loan duration of 3 years. The focus on new loans, stressed borrowers except NPAs will be covered.” She then added, “The new Credit Guarantee Scheme will also reach out to the smallest of the small borrowers in the hinterland, including in small towns.”