An initiative by the Small Industries Development Bank of India (SIDBI) and the Ministry of Micro, Small and Medium Enterprises, the CGTMSE was launched by the Government of India.
The essence of this scheme is to make collateral-free credit available to the micro and small enterprise sector. Collaterals pose a constant state of fear in the minds and hearts of an entrepreneur, which affects their efficiency at the tasks undertaken, thereby leading to inevitable mishaps.
Salient features of the CGT SME
- Funds and non-fund based credit facilities would be provided for up to ₹200 lakhs per eligible borrower. These charges would be covered under the guarantee scheme provided they are extended on the viability of the project without any collateral security or third party guarantee.
- The guarantee cover provided would be available to the extent of 50%, 75%, 80% and 85% of the amount sanctioned of the credit facility. The extent of guarantee cover is 85% for micro-enterprises for credit up to ₹50 lakhs. The extent of guarantee cover is 50% of the sanctioned amount of the credit facility for credit from ₹10 lakhs to ₹100 lakhs per MSE borrower for retail trade activity.
- The extent of guarantee cover is 80% if the MSME is operated or owned by women and if all credits or loans in the North East regions for credit facilities of up to ₹50 lakh.
If the features and the benefits that come with it have not won your trust over yet, then here are some words from the chairperson of CGTMSE that might be of help.
“I am optimistic that the role played by CGTMSE, as an enabler in the financial ecosystem will continue to benefit the new generation entrepreneurs in their entrepreneurial journey.”
-Mohammad Mustafa, I.A.S. (Chairperson, CGTMSE)
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