CGTMSE — Collateral-Free Credit for Micro & Small Enterprises
The Credit Guarantee Fund Trust for Micro and Small Enterprises — key features, guarantee cover and eligibility.
What is CGTMSE?
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a joint initiative by the Ministry of MSME, Government of India, and SIDBI. Established in 2000, it provides Hybrid/collateral-free or unsecured credit up to ₹10 crore to new and existing micro and small enterprises through member lending institutions.
Key Features of CGTMSE
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Collateral-Free Coverage: Loans up to ₹5 crore (and up to ₹10 crore in select cases) do not require third-party guarantees or property collateral.
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Guarantee Cover: Offers risk coverage ranging from 75% to 85% of the sanctioned credit facility.
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Eligible Lenders: Scheduled commercial banks, selected regional rural banks, and non-banking financial companies (NBFCs).
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Fees: Borrowers pay a nominal Annual Guarantee Fee (AGF) based on the loan size and category.
Eligibility Criteria
Registration: Must possess a valid MSME Registration.
Business Type: Covers manufacturing and service enterprises, including retail and wholesale trade.
Excluded Entities: Agriculture, self-help groups, and training or educational institutions are generally not eligible.