1. What is Distressed Asset Fund - Subordinated Debt for Stressed MSMEs?

The “Distressed Asset Fund - Subordinated Debt for Stressed MSMEs” is a scheme framed by Ministry of MSME under which credit facility would be provided to the Promoters of the stressed MSMEs to all the Member Lending Institutions (MLIs) registered under CGS-I of the Credit Guarantee Scheme for Micro and Small Enterprises

2. What is the Credit Guarantee Scheme for Subordinate Debt (CGSSD)?

Credit Guarantee Scheme for Subordinate Debt (CGSSD) (hereinafter referred to as “Scheme”) being operated by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) provides guarantee coverage to Member Lending Institutions (MLIs) for the credit facility extended to the eligible MSMEs under the above mentioned scheme.

3. What is the objective of the Scheme (CGSSD)?

The objective of the scheme is to provide credit facility through lending institutions to the promoters of stressed MSMEs viz. SMA-2 and NPA accounts who are eligible for restructuring as per RBI guidelines on the books of the Lending institutions. The promoter would infuse the credit in the MSME as quasi equity or sub-debt.

4. How do we define MSME?

Micro, Small and Medium Enterprises defined under the MSMED Act from time to time.

5. On what basis restructuring is carried out?

Banks are required to carry out restructuring of MSME accounts as per extant RBI guidelines.

6. Who will issue detailed operational guidelines for CGSSD?

CGTMSE will issue the detailed operational guidelines for the Scheme.