Objective. Micro, Small and Medium Enterprises (MSMEs) play an important role in the economic growth of the Country. However, they continue to face constraints in obtaining adequate finance particularly in terms of finding funds to execute the work orders and also to convert their bill receivables into liquid funds. The facilities like Bank Guarantees, Work Execution Loans, Bill Discounting, etc extended to MSMEs also, with the following exceptions:

Eligible MSMEs. All entities (having paid-up share capital plus free reserves not exceeding Rs.30 crore) with MSME-Udyam Registration are eligible under the Scheme, provided they meet the following additional eligibility criteria:

GST Registration. The applicant entity shall be GST registered. However, this condition will not apply to MSMEs exempt from GST registration (turnover up to and including Rs.40 lakh for manufacturing and Rs.20 lakh for the service sector, at present).

Financial Statements. The applicant entity should have the latest audited Financial Statements. However, this condition is not mandatory for MSMEs having annual turnover up to Rs.200 lakh, if income tax is paid on a presumptive basis. In such cases, IT returns should be collected. The credit decision shall be taken based on the analysis of pre- COVID 19 periods (i.e., FY 2018-19 and earlier years) Financial Statements.

Work Order in hand. The entity should have one Work Order while sanctioning the Line of Credit.

Line of Credit. The upper limit of Line of Credit shall be as follows:

Category	Eligible entities	Maximum LoC
Category ‘A’ Entities	Public Limited Companies Private Limited Companies Government-Owned Companies Corporations established by Law Registered Co-operative Societies	Rs.20 crore
Category ‘B’ Entities	Limited Liability Partnerships Partnership Firms Proprietary Concerns Registered Trusts Societies, including Charitable Societies One Person Companies Producer Companies Co-owner/ Co-borrower	Rs.8 crore
Category ‘C’ Entities	State PSUs. Without restriction on paid-up share capital and free reserves limit. GO (Ms) No.34/2021/Fin dated 20.02.2021 refers.	Rs.50 crore
Guarantees	All Category ‘A’, ‘B’ and ‘C’ entities. GO(Ms) No.91/2020/Fin dated 26.08.2020 refers.	Rs.50 crore (Such limit shall be in addition to Rs.8/ Rs.20 crore limit)
Discounting Promissory Notes issued by the Government	All Category ‘A’, ‘B’ and ‘C’ entities, which the aggregate of the paid-up share capital and free reserves not exceeding Rs.300 crore as on date of Balance Sheet as per previous Financial Year. GO (Rt) No.1555/2020/Fin dated 25.02.2020 refers.	Rs.50 crore

Type of facilities available to MSMEs. The MSMEs can avail of all facilities available in LoC Scheme (like PG/ BG, Work Execution loan, Bill Discounting, Equipment Finance, etc.). It is also clarified that:

• Work Issuing Authority shall be a Government Department/ Government Agency/ State or Central PSU/ Local Body.
• The Work Order includes Purchase Orders/ Letter of Intent/ Letter of Award, which are equivalent to Work Orders.
• Power of Attorney executed by the Entity in favour of KFC (with the virtual number mentioned) should be accepted by the WIA to ensure that all proceeds from WIA to the Entity are routed directly to the Corporation.

The cost of materials supplied by the WIA/ advance paid by the WIA/ AMC amount included in the Work Order/ deferred payments included in the Work Order/ etc. should be deducted from the Work Order Amount to calculate the eligibility of the Work Execution Facility.