Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
This profile has been independently compiled from official gazette notifications and verified web domains. Source Authority Link: www.cgtmse.in Authority: Ministry of Finance • State/Region: Central Scheme (All India) • Last Audited: 06 Sep 2026
Quick AI Summary
Provides collateral-free credit guarantee cover up to ₹5 crore for loans extended by Member Lending Institutions to Micro and Small Enterprises.
Detailed Summary
Objective
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was established to strengthen the credit delivery system and facilitate flow of credit to the MSE sector without the hassle of collateral security or third-party guarantees.
Mechanism
The Trust provides guarantee cover to Member Lending Institutions (MLIs) — Scheduled Commercial Banks, Regional Rural Banks, and select Financial Institutions — against credit facilities extended to eligible MSEs. The guarantee cover ranges from 50% to 85% of the credit facility depending on the category of borrower and loan amount.
Coverage
- Term loans and working capital facilities up to ₹5 crore per borrower.
- Enhanced guarantee cover of 85% for micro enterprises up to ₹5 lakh; 80% for women entrepreneurs, units in NER, Sikkim, Uttarakhand, Himachal Pradesh, J&K, Ladakh, Andaman & Nicobar, Lakshadweep, and Aspirational Districts; 75% for other micro enterprises above ₹5 lakh up to ₹5 crore; 50% for small enterprises above ₹5 crore up to ₹5 crore (effectively for small enterprises in the ₹2-5 crore bracket).
Key Benefits & Financial Assistance
| Comparison Criteria | Benefits |
|---|---|
| Key Benefits |
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Eligibility Criteria Profile
| Comparison Criteria | Eligibility |
|---|---|
| Occupation Status | Self-Employed |
| Domicile State | All India (Central Scheme) |
Application Process Guide
- Entrepreneur approaches a Member Lending Institution (MLI) — bank or financial institution registered with CGTMSE — with a viable project proposal.
- MLI appraises the project viability and creditworthiness as per its internal lending norms and RBI guidelines.
- Upon sanction of the credit facility, the MLI applies for guarantee cover to CGTMSE through the online portal (https://cgtmse.in) within the stipulated timeline (typically 6 months from date of first disbursement).
- MLI remits the applicable Guarantee Fee and Annual Service Fee to CGTMSE.
- CGTMSE issues Guarantee Certificate upon realization of fees.
- MLI disburses the loan to the entrepreneur; guarantee remains in force for the tenure of the credit facility subject to compliance with terms.
Common FAQs regarding this Yojana
The guarantee fee (one-time) and annual service fee are payable by the borrower (MSE) to the Member Lending Institution, which remits it to CGTMSE. Concessions in fees are available for micro enterprises up to ₹5 lakh, women entrepreneurs, SC/ST entrepreneurs, and units in specified regions.
No. The primary objective of CGTMSE is to facilitate collateral-free credit. Member Lending Institutions cannot insist on collateral security or third-party guarantee for the guaranteed portion of the credit facility up to ₹5 crore.
Yes. Both new and existing MSEs are eligible for guarantee cover for fresh credit facilities sanctioned by MLIs, provided the enterprise meets the eligibility criteria and is not in default to any financial institution.
80% of the credit facility (₹40 lakh), as women entrepreneurs in micro enterprises are eligible for enhanced guarantee cover of 80% for credit facilities above ₹5 lakh up to ₹5 crore.
Scheduled Commercial Banks, Regional Rural Banks, and select Financial Institutions (SIDBI, NSIC, NEFDC) can become MLIs by executing a Member Lending Institution Agreement with CGTMSE and paying the prescribed membership fee.
Upon invocation of guarantee by the MLI after following due recovery process (including NPA classification and legal action), CGTMSE settles the claim up to the guaranteed percentage of the outstanding amount (principal + interest up to date of NPA), subject to the terms of the Guarantee Agreement.