CGTMSE (Working Capital Loan)
- The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a transformative initiative designed to empower India’s micro and small businesses. Launched in August 2000 by the Government of India in collaboration with the Small Industries Development Bank of India (SIDBI), the scheme aims to provide financial security and promote entrepreneurial spirit.
- Operating under the Ministry of Micro, Small and Medium Enterprises, CGTMSE offers a crucial safety net by guaranteeing credit facilities to eligible enterprises. This assurance encourages banks and financial institutions to lend more freely, thereby reducing financial hurdles for small businesses. With its mission to mitigate business uncertainties, CGTMSE has become a cornerstone of support for entrepreneurs striving to contribute to India’s economic growth.
- Through this scheme, the government not only underscores its commitment to fostering a robust MSME ecosystem but also inspires innovation and resilience among small business owners.
- CGTMSE Loan Coverage
- The CGTMSE scheme supports new and existing businesses by covering term and working capital loans. Eligible enterprises can receive coverage of up to ₹500 lakh, ensuring robust financial support.
- Guarantee Coverage
- Covers 75% to 85%, with 50% for retail activities.
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Benefits of the CGTMSE Scheme
- Higher Coverage Limit
- Reduced Guarantee Fees
- Expanded Eligibility
- Special Concessions
- Enhanced Support for Women & Others
- Lower Guarantee Fee
Benefits of the CGTMSE Scheme
- Higher Coverage Limit: Raised from ₹200 lakh to ₹500 lakh.
- Reduced Guarantee Fees: Lower borrowing costs for MSEs.
- Expanded Eligibility: Micro Finance Institutions now included as MLIs.
- Special Concessions: Increased coverage and reduced fees for SC/STs.
- Enhanced Support for Women & Others: 85% coverage and 10% fee reduction for women, ZED-certified units, and units in aspirational districts.
- Lower Guarantee Fee: Revised structure with fees as low as 0.37%.
Lending Institutions under the CGTMSE Scheme
- Scheduled Commercial Banks (SCBs)
- Regional Rural Banks (RRBs)
- Small Finance Banks (SFBs)
- Non-Banking Financial Companies (NBFCs)
- Small Industries Development Bank of India (SIDBI)
- National Small Industries Corporation (NSIC)
- North Eastern Development Finance Corporation Ltd. (NEDFi)
CGTMSE Scheme Eligibility Criteria
- Age and citizenship: Indian citizens aged 18 years and above.
- Enterprise Type: Applicable to both new and existing micro and small enterprises.
- Sectors in focus: Includes trading, manufacturing, and service activities under the MSMED Act, 2006.
- Credit Facilities: Must be availed from a single enlisted lending institution specified by the CGTMSE.
- Additional Support: Enterprises supported by State-level Institutions, NSIC, or NEDFi are eligible.
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