CGTMSE Loan

CGTMSE stands for Credit Guarantee Fund Trust for Micro and Small Enterprises. The CGTMSE is set up by The Ministry of MSME, Government of India and SIDBI. The purpose of the scheme is to provide credit to micro and small enterprise sector without the need for collaterals/third party guarantees i.e a collateral- free credit to the MSE sector.

The industrial units (both the existing and the new industrial units) in MSE sector including those in the Information Technology and software sector and small scale service business (industry related) enterprises are eligible to be covered under the scheme, i.e the coverage of the Scheme is extended to all new and existing Micro and Small Enterprises (both in the Manufacturing Sector as well as in the Service Sector) as defined under MSMED Act, 2006.

The main objective is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed. The other objective is that the lender availing guarantee facility should endeavor to give composite credit to the borrowers so that the borrowers obtain both term loan and working capital facilities from a single agency.

The CGTMSE would provide cover for credit facility up to Rs. 500 lakhs i.e. the credit facilities cover both term loans and working capital facility up to Rs. 500 lakhs per borrowing unit (new or existing micro and small enterprise as defined under MSMED Act, 2006.).

The Guarantee cover under the scheme is for the agreed tenure of the term loan/composite credit. In case of working capital, the guarantee cover is of 5 years or block of 5 years.