The Credit Guarantee Fund Trust Micro and Small Enterprises (CGTMSE) scheme launched by the Government of India. That offers collateral-free credit to the micro and small enterprises sector.
The Ministry of Micro, Small and Medium Enterprises, Govt. of India and Small Industries Development Bank (SIDBI) have introduced the Micro Guarantee Fund Scheme for Micro and Small Enterprises, along with casing both offered and new enterprise schemes.
It establishes a trust called Credit Guarantee Fund Trust for End Small Enterprises & called a UDAAN scheme.
Let us find more about Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE):
What is the CGTMSE scheme?
Credit Guarantee Fund Trust for Micro and Small Enterprises was established on 30 Aug 2000. This scheme aimed to provide financial assistance to MSME. But its main problem was that it did not get enough credit nor could it get enough time for repayment.
To solve this problem, the Government of India has decided to provide loans without any guarantee or collateral. Under which, up to Rs. 2 Crore loans will be provided by almost all banks of the country under this CGTMSE scheme.
With this, it will be ensuring that if the trader is unable to repay the principal due to any reasonable reason, the government will give the debtors a cover of 75%.
CGTMSE Scheme Details & Benefits of the UDAAN Scheme:
– Funded and non-fund based (Letters of Credit, Bank Guarantee) credit facilities up to Rs 2 crores per eligible borrowers are providing under the Guarantee Scheme.
– Provided that they extend to project feasibility without collateral security or third party guarantee.
– The guarantee cover available under the scheme is 50% / 75% / 80% and 85% of the sanctioned amount of credit facility.
– The guarantee cover limit for micro-enterprises is 85% for credit up to Rs 5 lakh.
– The range of guarantee cover ranges from 50% of the credit facility for retail business activity to 50% of the credit facility for the MSE borrower. Guaranteed Cover Range is 80%.
– All credit/loans for credit facilities up to Rs 50 lakhs in North East Region (NER).
– In case of default, the trust claims up to 75% of the default in the extended loan facility for a loan facility up to Rs 2 crores by the loan facility.
Who can avail loans under Credit Guarantee Fund Trust Micro and Small Enterprises?
– Retail Trade
– Training Institutions
– Educational Institutions
Documents required applying for the Credit Guarantee Fund Trust Micro and Small Enterprises scheme:
– First business registration
– Your project report
– As well as obtaining a license by the government
– Current account and Business Pan Card in any bank
– Aadhaar Card, Income Proof and Tax Return
CGTMSE Benefits – How much coverage will be available?
– Generally, it provides loan coverage ranging from 50% to 80%, which is given according to different circumstances.
– If an MSME has women operations or masters, she gets a special exemption up to 80% coverage.
– Also, this facility is provided in the North-Eastern state of India – including the state of Sikkim.
– In case of default i.e. if the merchant is not able to do the loan repayment for any reasonable reason, then the claim will be set from 75% to 80% in the CGTMSE scheme for loan up to 50 lakh.
– If the loan amount is 50 lakh to 2 crores. The coverage will be giving up to 50%.
What is the eligibility of CGTMSE?
If any MSME industry which does not provide products and services, they will not be considering eligible, along with this, these trade-in services will not be eligible for this scheme.
– Retail trade
– Self Help Groups
– Training Institutions
– Educational Institutions
What will be the fees of the CGTMSE scheme?
– CGTMSE Yojana charges an annual fee of 1% of the loan amount.
– 0.75% – For loan amount up to Rs. 5 lakhs and
– 0.85% – For loan amount from 5 lakh to 1 crore
Where to get the CGTMSE application form?
You can get the CGTMSE application form from any bank. Also, you can download the form from the following link – https://www.cgtmse.in/files/Specimen%20for%20Guarantee%20application,NPA%20&%20Claim.pdf
Banks associated with CGTMSE scheme:
The following banks offer loans under CGTMSE Scheme:
– Scheduled Commercial Banks which can be Public, Private or Foreign Banks.
– 133 lending institutions, which have been registered as MLI’s Trust List.
– 73 Regional Rural Banks
– 26 Public Sector Banks
– 21 Private Sector Banks
– 4 Foreign Banks
– Delhi Financial Corporation (DFC)
– Kerala Financial Corporation (KFC)
– Development Finance Corporation Ltd.
– Export-Import Bank of India
– National Small Industries Corporation (NSIC)
– North Eastern Development Finance Corporation (NEDFI)
– Small Industries Development Bank of India (SIDBI)
How to Register to CGTMSE?
The loaning foundation covetous to enlist with CGTMSE may present an endeavor on a stamp paper of fitting an incentive to the enrolled office of the Trust.
The accompanying reports might be outfitted notwithstanding the endeavor for enrollment reason:
- Annual reports for the previous 3 years.
- List of workplaces alongside their addresses assigned to work the Credit Guarantee scheme with CGTMSE.
- Name and position of the assigned officials to work the plan, together with their signatures.
Who can check-in:-
- Only scheduled business banks are currently eligible.
- Regional Rural Banks need to check in with CGTMSE on submitting
1. Annual Reports for the closing 3 years
CGTMSE MEMBER LOGIN:
Click on the link CGTMSE MEMBER LOGIN
Non-Banking Financial Company Login (NBFC Login) on CGTMSE
Click on NBFC login
How to apply for a CGTMSE loan – How to Get Loan?
Here in the following, we present you with a step-by-step guide to applying for a CGTMSE loan.
Step 1: First complete your all documents:
– It doesn’t matter if you have a new business or an old one, because no bank will loan you unless you have proper documents, license, and permission. So first make your business organization and prepare the documents. For this, you have to complete these tasks.
– Register the business according to your Business Model.
– Apart from this, obtain the necessary license and permission from the government.
– Open Current Account and apply for Business PAN Card.
– Prepare other documents like Aadhar Card, Tax Returns and Income Proof.
Step 2: Prepare the Project Report or Business Plan:
– Project Report is the most important thing to get a loan under CGTMSE Scheme because the bank will decide based on whether you will get a loan or not. Keep these things in mind when making a Project Report or Business Plan –
– The project report should be Viable.
– The report should be full Proof based on Market Analysis, Return on Investment, Break-Even Point and Payback Calculation.
– With this, you can use appropriate data and information to give more confidence to the bank.
– You can take the help of Experts to make a better report so that there is no shortage in your report.
Step 3: Apply for the bank loan:
– When you have the necessary documents and project report ready, you can apply for a loan at your nearest bank.
– It would be advisable to know the bank where you have an account and start talking about the loan.
Step 4: Get coverage under CGTMSE scheme:
– When your loan accepts, the bank will apply to the government for approval of the scheme.
– After approval of the scheme, you will have to submit all the documents and pay the fees.
Overall, with this scheme, the Government of India has made changes in the CGTMSE scheme and implemented it again. In which now MSME industry can get a loan without any guarantee or security, just like a business loan is available in the Mudra scheme.
So if you want to start up your business, CGTMSE is the best scheme and can help you in providing business loans.
Credit Guarantee Fund Trust Micro and Small Enterprises Website: https://cgtmse.in/
CGTMSE Careers: https://cgtmse.in/Careers.html
The Head / Registered Office of the Credit Guarantee Trust –
The Chief Executive Officer
seventh Floor, SIDBI, Swavalamban Bhavan,
C-11, G – Block, BKC, (East) Bandra , Mumbai – 400051
Contact Numbers: 022-67221553, 022- 67221483
For Queries please contact:
CGTMSE Toll Free Number : 1800222659/ 022- 6722 1553
Office hours: 10:30 to 18:30