Subordinate Debt Scheme for stressed MSMEs

Subordinate Debt Scheme for stressed MSMEs


To provide personal loans to promoters of stressed MSMEs eligible for restructuring,  as per RBI guidelines for restructuring, for infusion as equity / quasi equity in the business


MSMEs whose accounts have been standard as on 31.03.2018 and have been in regular operations, either as standard accounts, or as NPA accounts during financial year 2018-19 and financial year 2019-20 are eligible under the Scheme. The Scheme is valid for MSME units which are stressed viz. SMA2 and NPA accounts as on 30-04-2020.

Validity of the Scheme

Applicable to subordinate debt sanctioned for a maximum period of 10 years from the guarantee availment date or March 31, 2021 whichever is earlier, or till an amount of Rs 20,000 crore of guarantee amount is approved

Loan amount

Up to 15% of promoter’s stake (equity plus debt) or Rs. 75 Lakh, whichever is lower


The tenor of sub-debt facility provided under DAF-SDSM shall be as per the repayment schedule defined by the bank, subject to a maximum tenor of 10 years.

Guarantee cover

CGTMSE provides guarantee coverage for the credit facility extended to the to the eligible MSMEs under the Subordinate Debt Scheme.