Credit Guarantee Fund

Micro and Small Enterprises (CGTMSE)

The Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) is a government-backed initiative designed to provide collateral-free credit to Micro and Small Enterprises (MSEs). It ensures that financial institutions have the confidence to lend to MSEs by guaranteeing a portion of the loan amount in case of default. This scheme is instrumental in empowering entrepreneurs and fostering the growth of the MSE sector in India.

Key Features:-

Facilitate easy access to credit for MSEs without requiring collateral or third-party guarantees.

Strengthen the credit delivery system to boost entrepreneurship and economic development.

Ensure financial institutions are reimbursed in case of default, reducing their risk.

Objectives:

Facilitate easy access to credit for MSEs without requiring collateral or third-party guarantees.

Strengthen the credit delivery system to boost entrepreneurship and economic development

Ensure financial institutions are reimbursed in case of default, reducing their risk.

Features of the Scheme:

Collateral-Free Loans: Loans up to ₹100 lakh are covered under this scheme.

Guarantee Coverage:

Up to 75% for credit facilities up to ₹50 lakh.

85% for loans up to ₹5 lakh for micro-enterprises.

80% for loans to women entrepreneurs and units in North-Eastern Region (NER) including Sikkim.

50% for credit exposure above ₹50 lakh and up to ₹100 lakh.

Achievements:

Cumulative Applications Covered: Over 21,60,975 credit applications.

Guarantee Coverage Provided: ₹103,864.11 crore since inception (as of 31.12.2015).

Corpus Contribution:

01)The scheme was launched in August 2000, with contributions from the Government of India (GoI) and SIDBI in a 4:1 ratio.

As of 31.12.2015, the corpus was ₹2419.955 crore, with ₹1935.97 crore contributed by GoI and ₹483.985 crore by SIDBI.

Annual Guarantee Fee:

1.0% of the sanctioned credit facility.

Reduced rates for specific categories:-01) 0.75% for loans up to ₹5 lakh.

02) 0.85% for loans above ₹5 lakh and up to ₹100 lakh for women, micro-enterprises, and units in NER.

Activities Under the Scheme:

Covers both term loans and working capital loans extended by eligible lending institutions.

Applicable for both new and existing MSEs.

Testimonials

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