Credit Guarantee Fund Trust (CGTMSE)

About This Scheme

CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) provides collateral-free credit guarantees to micro and small enterprises, operated jointly by the Government of India and SIDBI. Banks can lend up to 5 crore rupees without collateral under CGTMSE coverage. The trust pays the bank up to 75 to 85 percent of the defaulted amount if the borrower defaults, reducing lending risk and making it significantly easier for first-time entrepreneurs to get bank loans. CGTMSE has been a backbone of MSME lending in India since 2000, with over 75 lakh guarantees issued and the coverage ceiling recently raised to broaden access for growing businesses.

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) such as a commercial bank, SIDBI, NSIC, or 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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