CGTMSE Scheme Details

pages-image
shape

CGTMSE Scheme

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was established by the Government of India and SIDBI to provide credit guarantees to financial institutions lending to Micro and Small Enterprises (MSEs)

This initiative aims to facilitate access to credit for MSEs without the need for collateral or third-party guarantees.

Purpose

The primary objective of CGTMSE is to encourage financial institutions to extend credit to MSEs by providing them with a credit guarantee cover. This reduces the risk associated with lending to this sector and promotes the growth and development of MSEs.

Eligible Borrowers

Eligible borrowers under the CGTMSE scheme include new or existing Micro and Small Enterprises engaged in manufacturing or service activities, excluding retail trade, educational institutions, agriculture, self-help groups, training institutions, etc. The enterprises can be structured as sole proprietorships, partnerships, limited liability partnerships, private limited companies, or other legal forms

Eligible Lending Institutions

Member Lending Institutions (MLIs) eligible under the scheme encompass:

All scheduled commercial banks

Selected regional rural banks

Selected state financial corporations

Non-Banking Financial Companies (NBFCs)

Small Finance Banks (SFBs)

Scheduled Urban Co-operative Banks (including Non-Scheduled Urban Co-operative Banks, State Co-operative Banks, and District Central Co-operative Banks)

Microfinance Institutions (MFIs)

These institutions must enter into an agreement with CGTMSE to become MLIs and avail of the guarantee cover.

Credit Facilities Covered

The scheme covers both fund-based and non-fund-based credit facilities, such as term loans, working capital facilities, bank guarantees, and letters of credit, extended by MLIs to eligible MSEs. The maximum credit facility eligible for guarantee cover is up to ₹500 lakh per borrower.

Extent of Guarantee Cover

The extent of guarantee cover provided by CGTMSE varies based on the credit facility amount:

For credit facilities up to ₹5 lakh: 85% of the amount in default

For credit facilities above ₹5 lakh and up to ₹50 lakh: 75% of the amount in default

For credit facilities above ₹50 lakh and up to ₹200 lakh: 75% of the amount in default, subject to a maximum of ₹150 lakh

For credit facilities above ₹200 lakh and up to ₹500 lakh: 75% of the amount in default, subject to a maximum of ₹375 lakh

Annual Guarantee Fee (AGF)

MLIs are required to pay an Annual Guarantee Fee to CGTMSE, which is calculated as a percentage of the credit facility sanctioned. The AGF rates are subject to periodic revisions and are detailed in the scheme's fee structure.

Other Scheme

latest-image

Mudra Loan

October 08, 2024

Ready to Grow Your Business? Join CAIT Odisha Today!

Join CAIT Odisha and unlock exclusive business opportunities, policy advocacy, and financial & digital support. Connect with a strong network of traders and access resources to grow and succeed. Don’t miss out—become a member today!

Join Now

About CAIT Odisha

CAIT Odisha is dedicated to empowering traders and businesses with industry insights, policy updates, networking opportunities, and digital growth support. Join us to shape the future of trade.

Follow Us:

Academics

Quick Links

Contact Us

© Cait Odisha All Copyright Reserved