CGTMSE SCHEME-Credit Guarantee Fund Trust for Micro and Small Enterprises
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a scheme launched by the Government of India to provide collateral-free credit to micro and small enterprises (MSEs). The scheme was launched in August 2000 and is implemented by the Small Industries Development Bank of India (SIDBI) and the Ministry of Micro, Small and Medium Enterprises (MSME).
Under the CGTMSE scheme, the credit facility is provided to MSEs without any collateral security or third-party guarantee. The scheme covers both term loans and working capital loans up to a maximum limit of Rs. 2 crores per borrower.
The guarantee cover provided by the CGTMSE is up to 75% of the credit facility sanctioned by the lender. The guarantee cover is available for both new and existing MSE units, including those in the service sector. The scheme covers MSEs that are engaged in manufacturing, trading, and service activities.
The CGTMSE scheme has helped many small businesses to access credit and grow their businesses. However, the scheme has certain eligibility criteria and conditions that need to be fulfilled by the borrower and the lender. Interested borrowers can approach the participating banks and financial institutions to avail of the benefits of the CGTMSE scheme.
The eligibility criteria for availing of the benefits of the CGTMSE scheme are as follows:
Business Entity: The CGTMSE scheme is available for micro and small enterprises (MSEs) engaged in manufacturing, trading, and service activities. The MSEs can be in the form of sole proprietorships, partnership firms, co-operative societies, private limited companies, public limited companies, and self-help groups (SHGs).
Loan Amount: The scheme covers loans up to a maximum limit of Rs. 2 crores per borrower, including term loans and working capital loans.
Loan Purpose: The loan should be used for business purposes only and not for personal use.
Collateral Security: The CGTMSE scheme provides collateral-free credit to MSEs. Therefore, the borrower does not need to provide any collateral security or third-party guarantee for availing of the credit facility.
Credit History: The borrower should have a satisfactory credit track record, and there should not be any default in repayment of loans in the past.
Participating Financial Institutions: The CGTMSE scheme is available only through participating banks and financial institutions. The borrower should approach these institutions to avail of the benefits of the scheme.
It is important to note that the eligibility criteria and conditions for the CGTMSE scheme may vary depending on the participating financial institution and the scheme guidelines. Therefore, interested borrowers should approach the participating banks and financial institutions to know more about the scheme's eligibility criteria and application process.