Call Us Now

+91 9606900005 / 04

For Enquiry

legacyiasacademy@gmail.com

Credit Guarantee Fund Trust for Micro and Small Enterprises Scheme

Context:

Women-owned micro and small enterprises will get enhanced credit guarantee coverage of 90 percent under the CGTMSE scheme, after its board approved the new guidelines recently.

Relevance:

GS II: Government Policies and Interventions

Overview of CGTMSE:

  • Launched by the Ministry of Micro, Small & Medium Enterprises (M/o MSME) and operational since January 2000.
  • Aims to boost institutional credit accessibility to Micro and Small Enterprises (MSEs), particularly those that are unserved or underserved within the MSME sector.
Key Features:
  • Launch Date: Officially started on August 30, 2000.
  • Target Group: Focuses on providing credit to new entrepreneurs and those from economically disadvantaged backgrounds lacking collateral or third-party guarantees.
  • Collaborative Establishment: Developed jointly by M/o MSME and the Small Industries Development Bank of India (SIDBI).
Funding Structure:
  • Financial Support: Funded by contributions from the Government of India and SIDBI, maintaining a 4:1 ratio in favor of government support.
Eligibility and Lending Parameters:
  • Eligible Institutions:
    • Includes Scheduled commercial banks, certain Regional Rural Banks, National Small Industries Corporation Ltd. (NSIC), North Eastern Development Finance Corporation Ltd. (NEDFi), SIDBI, selected Small Finance banks, and NBFCs.
  • Credit Facilities:
    • Offers collateral-free credit support up to Rs. 5 crores.
    • Guarantee coverage varies by enterprise size and borrower category, providing up to 85% coverage for micro-enterprises for credits up to Rs. 5 lakhs, and 75% for larger amounts up to Rs. 500 lakhs.
    • Enhanced coverage for businesses in the North East Region and special categories such as women-owned MSMEs, SC/ST entrepreneurs, and businesses in Aspirational Districts.
In Event of Default:
  • Settlement Provisions: The trust handles claims by covering up to 75%, with specific cases allowing for 85% or 80% coverage, based on the borrower’s category.

-Source: The Hindu


October 2024
MTWTFSS
 123456
78910111213
14151617181920
21222324252627
28293031 
Categories