Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is jointly set up by Ministry of Micro, Small & Medium Enterprises (MSME), Government of India and Small Industries Development Bank of India (SIDBI) to catalyse flow of institutional credit to Micro & Small Enterprises (MSEs).
Credit Guarantee Scheme (CGS) was launched to strengthen credit delivery system and to facilitate flow of credit to the MSE sector, create access to finance for unserved, under-served and underprivileged, making availability of finance from conventional lenders to new generation entrepreneurs. Over the years, CGTMSE has been instrumental in providing guarantee cover to collateral and/or third party guarantee free credit facilities extended by eligible Member Lending Institution [MLIs] to MSEs.
Extant of Guarantee Coverage
| Category (including Trading activity) | Maximum extent of Guarantee Coverage where guaranteed credit facility is: |
| Upto Rs. 5 lakh | Above Rs. 5 lakh upto Rs. 50 lakh | Above Rs. 50 lakh & upto Rs. 500 lakh# |
| Micro Enterprises | 85% | 75% | 75% |
| MSEs located in North East Region (incl. Sikkim, UT of Jammu & Kashmir and UT of Ladakh) | 80% |
| Women entrepreneurs / SC/ST entrepreneurs / MSEs situated in Aspirational District / ZED* certified MSEs / Person with Disability (PwD) / MSE promoted by Agniveers | 85% |
| All other category of borrowers | 75% |
# Restricted to Rs. 50 lakh for RRBs, 200 lakh for SFBs and Co-operative Banks* Zero Defect Zero Effect
In case the lender is a NBFC, the extant of Guarantee Cover is determined by the Trust and the Guaranteed Credit Facility is limited to Rs. 200 lakh (Rs. 100 lakh for Retail Trade)
The lender is required to pay Annual Guarantee Fee (AGF) to the Trust to avail the coverage. Guarantee will commence from the date of payment of guarantee fee and shall run through the agreed tenure of the term credit in case of term loans / composite loans and for a period of 5 years where working capital facilities alone are extended to borrowers, or for such period as may be specified by the Guarantee Trust in this behalf.
Further information about the scheme can be obtained from the website link given below.
https://www.cgtmse.in