Credit Guarantee Fund Trust (CGTMSE)

About This Scheme

CGTMSE provides collateral-free credit guarantees to micro and small enterprises. Banks can lend up to ₹5 crore without collateral under CGTMSE coverage. The trust pays the bank if the borrower defaults, reducing lending risk and making it easier for first-time entrepreneurs to get loans.

Ministry: Ministry of Micro, Small & Medium Enterprises

Eligibility

New and existing micro and small enterprises engaged in manufacturing or services (excluding retail trade, self-help groups, and agriculture); credit facility up to ₹500 lakh from eligible lending institutions.

Key Benefits

• Collateral-free loans up to ₹5 crore
• Guarantee cover up to 85% for micro enterprises (up to ₹5 lakh)
• Guarantee cover up to 75% for loans above ₹5 lakh
• Additional 10% cover for women entrepreneurs, ZED-certified units, and NER units
• One-time guarantee fee as low as 0.37% per annum

Application Process

1. 1Approach any MLI (Member Lending Institution) — commercial bank, SIDBI, NSIC, NEDFi
2. 2Apply for a loan under CGTMSE scheme
3. 3Bank evaluates and sanctions the loan
4. 4Bank applies to CGTMSE for guarantee cover
5. 5CGTMSE issues guarantee — no direct application by borrower needed

Documents Required

• Standard loan application documents
• Business plan / Project Report
• KYC documents
• Financial statements (for existing businesses)
• Udyam Registration certificate

Official Links

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