Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE)
Credit guarantee support enabling micro and small enterprises to access collateral-free institutional credit. Credit guarantee support enabling micro and small enterprises to access collateral-free institutional credit.
योजना विवरण
Overview: Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE)
A flagship credit delivery framework jointly set up by the Ministry of MSME and the Small Industries Development Bank of India (SIDBI) to ensure collateral-free and third-party-guarantee-free institutional debt for micro and small businesses.
What is the CGTMSE Scheme?
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) enables first-generation entrepreneurs and existing business owners to access term loans and working capital credit without pledging physical land, property, or providing third-party guarantors. In case of business default, the Trust settles up to 85% of the outstanding loan amount directly with the lending financial institution.
Key Scheme Highlights
| Parameters | Scheme Guidelines |
|---|---|
| Joint Promoters | Ministry of MSME (Govt. of India) & SIDBI |
| Maximum Loan Ceiling | Up to ₹500 Lakh (₹5 Crore) per enterprise unit |
| Collateral / Third-Party Security | Zero (Strictly collateral-free institutional debt) |
| Guarantee Coverage Ratio | Up to 85% for Micro enterprises, Women entrepreneurs, and NE Region |
| Eligible Financial Lenders | All Scheduled Commercial Banks, RRBs, SFBs, and leading NBFCs |
Key Benefits of CGTMSE
- No Asset Mortgage Required: Borrowers are not required to mortgage residential property, factory land, or personal assets to secure funding.
- High Borrowing Limit: Covers credit facilities (Fund-based term loans and working capital) up to ₹5 Crore for scaling businesses.
- Preferential Coverage for Targeted Categories: Women entrepreneurs, SC/ST promoters, and enterprises in NER/Aspirational Districts receive higher guarantee support (up to 85%).
- Reduced Annual Guarantee Fee (AGF): Streamlined risk-based fee structure reducing borrowing overheads for lower loan slabs.
Eligibility Criteria
- Both new and existing Micro and Small Enterprises (MSEs) engaged in manufacturing, services, and retail trade sectors.
- Enterprise must hold a valid Udyam Registration Certificate.
- Educational/training institutions, agriculture, SHGs, and medium enterprises are excluded from CGTMSE coverage.
- Borrower account must not be classified as a defaulter or NPA across other financial institutions.
Step-by-Step Loan Application Procedure
- Prepare a detailed Detailed Project Report (DPR) outlining business model, capital expenditure, and working capital needs.
- Obtain your Udyam Registration Number online via the government MSME portal.
- Approach any Member Lending Institution (MLI) such as SBI, PNB, Bank of Baroda, or authorized NBFCs.
- Apply for a business loan and specify coverage under the CGTMSE Credit Guarantee Scheme.
- Upon technical sanction of the loan by the bank, the lender directly lodges the guarantee cover request with CGTMSE Trust.
