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CGTMSE Scheme

CGTMSE scheme offers credit guarantees to financial institutions up to Rs. 5 crores. CGTMSE scheme offers credit guarantees of 75% to 85% to Micro & Small Enterprises (MSEs) across India. Below is a detailed explanation of various aspects of the CGTMSE scheme.

Updated:

What is CGTMSE

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is set up jointly by the Ministry of Micro, Small & Medium Enterprises (MSME), the Government of India, and the Small Industries Development Bank of India (SIDBI) to provide institutional credit to MSEs. Credit Guarantee Scheme (CGS) was introduced to enhance the credit delivery system and to facilitate the flow of credit to the MSE sector, provide access to finance for unserved/ under-served/ underprivileged, and make finance available from conventional lenders to new generation entrepreneurs.

Benefits of the CGTMSE Scheme

  • The ceiling for guarantee coverage has been increased from Rs. 2 Crores to Rs. 5 Crores.
  • CGTMSE has touched the milestone figure of approving guarantees worth Rs. 1 lakh crore during FY 2022 - 23.
  • The guarantee fee has been reduced to lower the overall cost of borrowings to MSEs.
  • Concessions in fees and increased coverage to Scheduled Castes (SCs)/ Scheduled Tribes (STs).
  • Micro Finance Institutions (MFIs) as Member Lending Institutions (MLIs) are eligible now.
  • The annual guarantee fee structure is revised and the CGTMSE fee is reduced to 0.37%.
  • The guarantee fee has been reduced by 10% and the coverage extent has been increased to 85% for women, ZED-certified units, and units in aspirational districts.

Interest Rate on CGTMSE Loans

CGTMSE loan interest rate or Annual Guarantee Fee (AGF) structure under Credit Guarantee Scheme (CGS-I) on all the guarantees approved/ renewed on or after 01 April 2023 ranges from 0.37% to 1.35% p.a., depending on the loan slab.

Fees & Charges for the CGTMSE Scheme

To cover the loan under the CGTMSE, the borrower has to pay an additional guarantee fee and service charge in addition to the interest charged by the bank. The cost of the guarantee has been reduced with the revamp of the Credit Guarantee Scheme to increase the flow of credit to MSEs. The revised CGTMSE charges or Annual Guarantee Fee (AGF) structure under the Credit Guarantee Scheme (CGS-I) on all the guarantees approved/ renewed on or after 01 April 2023 is given below:

SlabStandard Rate 
Rs. 0 - Rs. 10 Lakhs0.37% p.a.
Above Rs. 10 Lakhs - Rs. 50 Lakhs0.55% p.a.
Above Rs. 50 Lakhs - Rs. 1 Crore0.60% p.a.
Above Rs. 1 Crore - Rs. 2 Crores 1.20% p.a.
Above Rs. 2 Crores - Rs. 5 Crores 1.35% p.a.

*Above Rs. 2 - Rs. 5 Crores, 1.35 AGF will be charged on the guaranteed amount for the first year and on the outstanding amount for the remaining tenure of the credit facility.

How to Apply for a CGTMSE Loan?

Following is the process for availing of loans under CGTMSE:

  • Form a business entity: Firstly, you have to incorporate a private limited company/ limited liability partnership/ one-person company/ proprietorship based on the nature of your business and get all necessary approvals and tax registrations for commencing the project.
  • Prepare a business report: Prepare a business report/plan mentioning relevant information, such as business model, promoter’s profile, projected financials, etc. Present the report to the credit facility along with a filled and signed application for getting the loan under the CGTMSE scheme. 
  • Loan sanction: Banks will analyze your business viability after you submit the application and business plan. If they are satisfied, they will process your loan application, and provide sanction, as per their policy.
  • Obtaining the guarantee cover: Post CGTMSE loan sanction, the bank applies CGTMSE authority to obtain the guarantee cover. If the loan request is approved by CGTMSE, you will have to pay a guarantee fee and service charge.

CGTMSE Loan Documents Required

You will be required to submit the following documents to get a loan and CGTMSE coverage under the CGTMSE scheme:

  • Duly filled and signed CGTMSE loan application. 
  • Recent passport-size photographs.
  • Business Incorporation/ Company Registration Certificate
  • Business Project Report
  • CGTMSE Loan Coverage Letter
  • A copy of loan approval from the bank
  • Any other document as required by the bank

Eligibility Criteria for the CGTMSE Scheme

The following are the CGTMSE scheme eligibility criteria:

  • Eligible borrowers: All existing as well as new Micro and Small Enterprises (MSEs)
  • CGTMSE bank list that offers loans under CGTSME Scheme: Non-Banking Financial Companies (NBFCs), Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Small Finance Banks (SFBs), National Small Industries Corporation (NSIC), Small Industrial Development Bank of India (SIDBI), and North Eastern Development Finance Corporation Ltd. (NEDFi).
  • Small and Micro-Enterprises (SMEs) owned and/or operated by women are eligible for a guarantee cover of 80%.
  • All the loans in the North East Region (NER) are eligible for a guarantee of Rs. 50 Lakhs.
  • The CGTMSE loan limit entirely depends on the applicant’s profile and business requirements.
  • Educational institutions, training institutions, agriculture, and Self-Help Groups (SHGs) are not eligible for CGTMSE guarantee cover.

Coverage of the CGTMSE scheme

  • The trust guarantees up to 75% of the principal amount (up to 85% for select categories).
  • The cover provides a maximum guarantee limit of Rs. 37.50 Lakhs for credit facilities up to Rs. 50 Lakhs.
  • The credit along with the interest is covered for the one-quarter period and/or outstanding capital advances, as on the date of the account becoming an NPA (Non-Performing Asset) or as on the date of filing the suit (whichever is lower).
  • Charges like penal interest, service charge, commitment charge, or any other levy/expense do not qualify for the guarantee cover.

Below is the detailed information on the CGTMSE scheme subsidy or coverage limit under CGTMSE:

Category including Trading activity)Maximum Extent of Guarantee Coverage Where Guaranteed Credit Facility is
Up to Rs. 5 LakhsAbove Rs. 5 Lakhs & up to Rs. 50 LakhsAbove Rs. 50 Lakhs & up to Rs. 5 Crores
Micro enterprises85%75%75%
MSEs located in NER (including Sikkim, UT of Jammu & Kashmir and UT of Ladakh)80%80%75%
Women entrepreneurs/ SC/ST entrepreneurs/ MSEs situated in aspirational district/ ZED certified MSEs/ Person with disability/ MSE promoted by Agniveers85%85%85%
All other category of borrowers75%75%75%

List of Banks That Offer CGTMSE Loan

Following is the list of banks that offer CGTMSE Loans:

Public Sector BanksPrivate Sector BanksRegional Rural BanksForeign BanksSmall Finance BanksFinancial InstitutionsScheduled Urban Cooperative BanksOther Cooperative BanksMicro Finance Institutions
Bank of BarodaAxis Bank Ltd.Andhra Pradesh Grameena Vikas BankBank of Bahrain and KuwaitAU Small Finance BankAndhra Pradesh State Financial CorporationSaraswat Co-operative Bank Ltd.Shri Vinayak Sahakari Bank LtdVedika Credit Capital Limited
Canara BankCity Union BankChaitanya Godavari Gramin BankDBS BankSuryoday Small Finance Bank Ltd.North Eastern Development Finance Corporation Ltd.The Kalupur Commercial Co-op Bank LtdGujarat Mercantile Co.op Bank LtdMidland Microfin
Indian Overseas BankICICI Bank Ltd.Jharkhand Rajya Gramin BankStandard Chartered BankShivalik Small Finance BankNCDCNutan Nagarik Sahakari Bank Ltd.Priyadarshani Nagari Sahakari Bank Ltd, JalnaLight Microfinance Private Limited
State Bank of IndiaIndusInd Bank Ltd.Meghalaya Rural BankBarclays Bank PLCFincare Small Finance BankDelhi Financial CorporationBombay Mercantile Co-operative Bank LtdTripura State Co-operative Bank Ltd
Bank of IndiaLakshmi Vilas BankPuduvai Bharathiar Grama BankDeutsche BankEquitas Small Finance Bank Ltd.Jammu & Kashmir Development Finance Corporation LtdTJSB Sahakari Bank Ltd.The Andhra Pradesh State Co-operative Bank Ltd
Central Bank of IndiaThe Federal Bank Ltd.Saurashtra Gramin BankSBM Bank (India) LtdUjjivan Small Finance Bank Ltd.Small Industries Development Bank of IndiaJalgaon Peoples Co-op Bank LtdJalgaon Peoples Co-op Bank Ltd
Punjab & Sind Bank The Nainital Bank Ltd.Uttar Bihar Gramin BankUtkarsh Small Finance BankExport Import Bank of IndiaSVC Co-operative Bank LtdSurat National Co-op Bank Ltd
UCO BankYES Bank LimitedTripura Gramin BankESAF Small Finance Bank Ltd.Kerala Financial CorporationCitizen Credit Co-operative Bank LtdThe Bapunagar Mahila Co-operative Bank Ltd
Bank of MaharashtraBandhan Bank LimitedBaroda U.P. BankNorth East Small Finance BankNational Small Industries Corporation Ltd.NKGSB Co-Operative Bank Ltd.The Vijay Co-operative Bank
Indian BankDCB Bank LtdAndhra Pragathi Grameena BankJana Small Finance BankThe Tamil Nadu Industrial Investment Corporation Ltd.Surat Peoples Coop Bank LtdThe West Bengal State Co-Operative Bank
Punjab National BankIDBI Bank Ltd.Chhattisgarh Rajya Gramin BankThe Ahmedabad Mercantile Co-op Bank LtdThe Banaskantha Mercantile Co-op Bank ltd, Palanpur
Union Bank of IndiaKarnataka Bank Ltd.Karnataka Vikas Grameena BankNew India Co-operative Bank LtdThe Prakasam District Co-operative Central Bank
Tamilnad Mercantile Bank Ltd.Mizoram Rural BankAndhra Pradesh Mahesh Co-operative Urban Bank LtdThe District Co-operative Central Bank Ltd, Khammam
The Jammu & Kashmir Bank Ltd. Saptagiri Gramin BankShree Dharati Co-operative Bank
RBL BankTamil Nadu Grama BankThe District Co-operative Central Bank Ltd, Medak
Catholic Syrian BankRajasthan Marudhara Gramin BankAdinath Co-operative Bank Ltd
HDFC Bank Ltd.Maharashtra Gramin BankTelangana State Co-operative Apex Bank
IDFC First Bank Ltd.Baroda Rajasthan Kshetriya Gramin BankThe Ahmedabad District Co-operative Bank Ltd
Kotak Mahindra Bank Ltd.Himachal Pradesh Gramin BankThe Hisar Central Co-operative Bank
The Dhanalakshmi Bank Ltd.Kerala Gramin BankThe Sutex Co-operative Bank Ltd
The Karur Vysya Bank LtdPrathama UP Gramin BankNutan Nagarik Sahakari Bank Ltd.
The South Indian Bank Ltd.Sarva Haryana Gramin BankUP Co-operative Bank Ltd
Telangana Grameena BankThe District Co-operative central Bank Ltd, Vizianagram
Punjab Gramin BankChhattisgarh Rajya Sahakari Bank MYDT Raipur 
Arunachal Pradesh Rural BankThe Kadapa District Co-operative Bank
Prime Co-operative Bank ltd
The Warangal District Co-operative Central Bank
Sindhudurg District Central Co-op Bank, Sindhudurg
Sawai Madhopur Kendriya Sahakari Bank Ltd
Darjeeling District Central Co-operative Bank Ltd
The Bhuj Mercantile Co-op Bank Ltd
Sikkim State Co-operative Bank
The Adarsh Co-operative Urban Bank Limited
Shri Swami Samarth Sahakari Bank Ltd
The Rajasthan State Co-operative Bank Ltd
Bagini Nivedita Bank
Vasai Janata Sahakari Bank Ltd
Sri Potti Sri Ramulu Nellor District Cooperative Central Bank Ltd
Shri Rukmini Sahakari Banl Ltd
The Bihar State Co-operative Bank
The Tamil Nadu State Apex Co-operative Bank
The Guntur District Co-operative Central Bank
The Gujarat State Co-operative Bank Ltd
The Chittoor District Co-operative Central Bank Ltd
The District Co-operative Central Bank Ltd, Srikakulam
The Kurmanchal Nagar Sahkari Bank Ltd
The District Co-operative Central Bank Ltd, Visakhapatnam

FAQs

What is CGTMSE full form in banking?

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CGTMSE full form in banking is Credit Guarantee Fund Trust for Micro and Small Enterprises.

What is the maximum loan under CGTMSE?

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The maximum loan limit under CGTMSE is up to Rs. 5 Crores.

What are the benefits of CGTMSE scheme?

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  • Ceiling for guarantee coverage has been increased from Rs. 2 Crores to Rs. 5 Crores.
  • CGTMSE has touched the milestone figure of approving guarantees worth Rs. 1 lakh crore during FY 2022 - 23.
  • Guarantee fee has been reduced to lower the overall cost of borrowings to MSEs.
  • Concessions in fees and increased coverage to Scheduled Castes (SCs)/ Scheduled Tribes (STs).
  • Micro Finance Institutions (MFIs) as Member Lending Institutions (MLIs) are eligible now. 
  • Annual guarantee fee structure is revised and is reduced to 0.37%.
  • The guarantee fee has been reduced by 10% and the coverage extent has been increased to 85% for women, ZED-certified units, and units in aspirational districts.

What is the lock period for CGTMSE?

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The lock-in period for CGTMSE is 18 months.

What is the interest rate on CGTMSE?

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CGTMSE loan interest rate or Annual Guarantee Fee (AGF) structure under Credit Guarantee Scheme (CGS-I) on all the guarantees approved/ renewed on or after 01 April 2023 ranges from 0.37% to 1.35% p.a., depending on the loan slab.

How do I get CGTMSE coverage?

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When a sub-debt is sanctioned, the bank will log in to the CGTMSE portal and apply for the guarantee coverage. On receiving the application, the guarantee is approved by CGTMSE under 24 hours and upon paying the applicable guarantee fee, the guarantee becomes live.