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Simranmeet Singh
Simranmeet

Nov 05, 2020

CGTMSE

CGTMSE ( Credit Guarantee Fund Trust for Small & Medium Enterprises)

 

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CGTMSE scheme was established in the year 2000. The objective of CGTMSE scheme is to provide bank credit to MSMEs without the hassles of Collaterals/third party Guarantees so that young enterpreneurs can realise their dream of setting up or running their own Micro & Small Enterprises. It is for the purpose of strengthing credit flow to the MSME sector.

Under CGTMSE, MSMEs including service sector are eligible for loan upto Rs 2 crore. The Loan sanctioned in the scheme is backed by the Trust which provides the Guarantee cover for the large portion of the amount.

 

Important Features of CGTMSE Scheme

1.Lending Insitutions :

 

For Institutions — Publons

All scheduled Commercial Banks, Specified Regional Rural Banks (RRB), Non Banking Financial Companies (NBFCs),Small Finance Banks,Foreign Banks and Financial Institutions are eligible Lending Instituions.The Institution that has an agreement with Trust are called Member Lending Institutions.

2.The Trust guarantees upto 75% of the defaulted principal amount ( the extent of credit guarantee is 85% for micro enterprises for credit upto Rs 5 Lacs).The cover come up with the maximum guarantee cover of Rs 1.5 cr for Rs 2 crore Loan.

 

CategoryMaximum extent of Guarantee where credit facility is
Upto  5 lakhAbove  5 lakh upto  50 lakhAbove  50 lakh upto  200 lakh
Micro Enterprises85% of the amount in default subject to a maximum of  4.25 lakh75% of the amount in default subject to a maximum of  37.50 lakh75% of the amount in default subject to a maximum of  150 lakh
Women entrepreneurs/ Units located in North East Region (incl. Sikkim) (other than credit facility upto  5 lakh to micro enterprises)

 

80% of the amount in default subject to a maximum of  40 lakh
All other category of borrowers75% of the amount in default subject to a maximum of  37.50 lakh
ActivityFrom  10 lakh upto  100 lakh
MSE Retail Trade50% of the amount in default subject to a maximum of  50 lakh

3. Non-Eligibility

 

 

Any facility given on the basis of third party guarantee and where the type of activity is not manufacturing, services and retail trade shall not be allowed for coverage under the CGTMSE scheme.Partial collateral security model can be used where the MLIs will be allowed to obtain collateral security for a part of the credit facility, whereas the remaining part of the credit facility, up to a maximum of ₹ 200 lakh can be covered under the CGTMSE Scheme.The Trust also reserves the right to reject any application for the guarantee cover, if it deems necessary.