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    Question

    What is the tenure of guarantee cover provided for

    working capital facilities under the Credit Guarantee Scheme for Micro and Small Enterprises?
    A 2 years or a block of 2 years Correct Answer Incorrect Answer
    B 3 years or a block of 3 years Correct Answer Incorrect Answer
    C 5 years or a block of 5 years Correct Answer Incorrect Answer
    D 10 years or a block of 5 years Correct Answer Incorrect Answer
    E Up to the life of the business Correct Answer Incorrect Answer

    Solution

    The scheme distinguishes between term loans/composite credit and working capital facilities when it comes to guarantee tenure. For term loans, the guarantee cover is provided for the agreed duration of the loan. In contrast, for working capital facilities, the scheme provides guarantee cover for a period of 5 years or a block of 5 years. This structured time frame helps in managing the risk exposure for the Credit Guarantee Trust while ensuring reasonable duration for enterprise stabilization and operational continuity.

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