What is CGTMSE Scheme?
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was launched on 20 August 2020. The scheme was launched by the Government of India in association with the Ministry of Medium, Small and Micro Enterprises (MSME), and SIDBI. The primary motive of the CGTMSE scheme is to provide the credit assurance/ guarantee to the bank and other institutions to provide business to MSMEs.
Full Form Of CGTMSE
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Features of CGTMSE Scheme
- Reimbursement of 75% (85% in some cases) of the defaulted actual/ principal loan amount.
- The maximum cap for compensation is Rupees Sixty-two lakhs and fifty thousand to Rupees Sixty-five lakhs for business loans up to Rs. 50 lakhs.
- If the amount of the load is more than fifty (50) lakhs but and less than One Hundred (100) lakhs, then, in that case, the maximum guarantee is 50% of the loan amount.
- The maximum guarantee will be 85% if the loan is taken up to Rs. 05 lakhs (Microloan). It may be noted that 85% of the actual loan amount is enclosed for loans taken in the NER and by women businesspersons.
Table For The Maximum Guarantee Cover Under The Scheme
|Category||The maximum amount of credit facility|
|Up to Rs. 5 lakh||More than Rs. 5 lakh to Rs. 50 lakh||More than Rs.50 lakh to Rs. 2 crores|
|Micro Enterprises||85 % of the default amount maximum of Rs. 4.25 lakhs.||75 % of the default amount maximum of Rs. 37.50 lakhs.||75 % of the default amount maximum Rs.1.5 crores|
|Women and Units in NER||80 % of the default amount maximum Rs.40 lakhs for credit facility up to Rs.50 lakhs.|
|All others||75 % of the default amount maximum Rs.40 lakhs for|
|Business activity||Credit from Rs.10 lakhs to Rs. 1 crore|
|MSE Retail Trade||50% of the default amount maximum of Rs.50 lakhs.|
Process To Avail a Loan Under CGTMSE
Fee Charged by CGTMSE
It may be noted that the 1% fee will be charged with the total sanctioned amount
- 0.75 % for credit of up to Rs. 5 Lakhs
- 0.85% for credit that is above Rs. 5 Lakh but up to Rs. 100 Lakh
Procedure For Getting Loan Under CGTMSE
- Prepare a Business Plan
First of all, a proper business plan must be prepared; the plan must include all the details of the business and should also have the practicality of the project.
- Choosing the Lender Bank
After preparing the plan and amount of the loan, the next step is to choose the appropriate lender bank.
- Submit the Application
After selecting the appropriate bank next step is to fil the application form by providing necessary details and also require to submit the same as per the rules and the regulations.
- Verification of the Details
Now the bank will check the application form and check all the details of the business plan.
- Approve and Releasing Funds
After that bank will approve the application form if all the details are valid release the funds.
- Fee Payment
Finally, the borrowers have to pay the CGTMSE guarantee and required fee