CREDIT GUARANTEE SCHEME FOR MSE
- Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE) is a trust established by the Government of India, under the Ministry of Micro, Small and Medium Enterprises (MoMSME) and Small Industries Development Bank of India (SIDBI).
- Launched in 2000, the CGTMSE scheme offers credit guarantees to financial institutions that offered credit facilities up to Rs. 5 crores
- CGTMSE scheme offers credit guarantees from 75% to 85% of the defaulted principal amount to MSEs across India.
- Manufacturing and Services including Retail trade is allowed however, Educational and Training institutions, Self Help Groups (SHGs), and agriculture-related activities are not eligible for the scheme.
- Credit Guarantee refers to a situation where the loan to the applicant is backed by a party without the need for any external collateral or third-party guarantee. Here, the loan sanctioned by the member lending institution is backed by the scheme which provides the guarantee cover for a large portion of the loan amount.