On August 19, the government operationalised the Credit Guarantee Scheme for Subordinate Debt for stressed Micro, Small & Medium Enterprises (MSMEs). It had announced this scheme as part of the Aatma Nirbhar Bharat Package.

Here’s a look at what the scheme involves and what it means for MSMEs. What is subordinate debt? Subordinate debt is a type of debt that an individual or a company can take on and which has a lower priority of repayment. In other words, in the event of liquidation or bankruptcy, the borrower would first pay off other “senior” debt and …

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