Credit Guarantee Fund Scheme for Micro and Small Companies

2.1.2021 Zařazen do: Nezařazené — webmaster @ 9.28


1. Of all issues faced by the MSEs, non-availability of timely and credit that is adequate reasonable rate of interest the most essential. One of many significant reasons for low accessibility to bank finance for this sector could be the risky perception associated with the banking institutions in lending to MSEs and consequent insistence on collaterals that are not readily available by using these enterprises. The thing is much more serious for micro enterprises needing tiny loans additionally the generation that is first.

2. The Credit Guarantee Fund Scheme for Micro and tiny Enterprises (CGS) was released by the federal government of Asia (GoI) to offer collateral-free credit to your micro and enterprise sector that is small. Both the prevailing and also the enterprises that are new qualified become covered beneath the scheme. The Ministry of Micro, Small and Medium Enterprises, GoI and Small Industries developing Bank of Asia (SIDBI), founded a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to make usage of the Credit Guarantee Fund Scheme for Micro and Small Enterprises. The scheme had been formally launched on 30, 2000 august. The corpus of CGTMSE has been added because of the GoI and SIDBI into the ratio of 4:1 correspondingly and contains added Rs. 2477.78 crore towards the corpus of this Trust as much as might 31, 2016. The corpus was to be raised to Rs.2500 crore by the end of 11th Plan as announced in the Package for MSEs.

Qualified Lending Institutions

3. The Banking institutions / Financial Institutions, which meet the criteria underneath the scheme, are planned commercial banking institutions (Public Sector Banks/Private Sector Banks/Foreign Banking institutions) and choose Regional Rural Banks (which were categorized under ‘Sustainable Viable’ category by NABARD). As may 31, 2016, there have been 133 eligible Lending organizations registered as MLIs regarding the Trust, comprising of 26 Public Sector Banks, 21 Private Sector Banks, 73 Regional Rural Banks (RRBs), 4 Foreign Banks and 9 other organizations for example. Delhi Financial Corporation, Kerala Financial Corporation, Jammu & Kashmir developing Finance Corporation Ltd, Andhra Pradesh State Financial Corporation, Export Import Bank of Asia, The Tamil Nadu Industrial Investment Corporation Ltd., National Small Industries Corporation (NSIC), North Eastern developing Finance Corporation (NEDFI) and Small Industries developing Bank of Asia (SIDBI).

Eligible Credit Center

4. The credit facilities that are qualified become covered beneath the scheme are both term loans and/or working money center as much as Rs.100 lakh per borrowing product, extended without the safety protection and / or 3rd party guarantee, to a different or current micro and enterprise that is small. For anyone devices covered beneath the guaranteescheme, which could be unwell due to factors beyond the control over administration, rehabilitation support extended by the loan provider could be covered under also the guarantee scheme. Any credit center in respect of which risks are additionally covered under a scheme, operated by national or any other agencies, won’t be qualified to receive coverage beneath the scheme.

Guarantee Protect

5. The guarantee address available beneath the scheme would be to the level of maximum 85% associated with the sanctioned level of the credit center. The guarantee address supplied is as much as 75% regarding the credit center as much as Rs.50 lakh (85% for loans as much as Rs. 5 lakh provided to micro enterprises, 80% for MSEs owned/ operated by females and all sorts of loans to NER including Sikkim) with a guarantee that is uniform 50% for your quantity in the event that credit publicity is above Rs.50 lakh or over to Rs.100 lakh. In case there is standard, Trust settles the claim as much as 75per cent (or 85% / 80% / 50% wherever applicable) for the quantity in standard associated with the credit center extended by the loan company. The amount in default is reckoned as the principal amount outstanding in the account of the borrower, in respect of term loan, and amount of outstanding working capital facilities, including interest, as on the date of the account turning Non-Performing Asset (NPA) for this purpose.

Tenure of Guarantee

6. The Guarantee address beneath the scheme is actually for the agreed tenure associated with term loan/composite credit. In case there is working money, the guarantee address is of 5 years or block of 5 years.

Fee for Guarantee

7. A composite all-in Annual Guarantee Fee of 1.0 per cent p.a. associated with credit center sanctioned (0.75% for credit center upto Rs. 5 lakh and 0.85% for above Rs. 5 lakh and upto 100 lakh for females, Micro companies and units in NER including Sikkim) is now being charged.

Web Site / Circulars

8. Information on the scheme along side latest circulars can be found in the internet site of CGTMSE at

Scheme Awareness Programmes

9.1 CGTMSE has used multi-channel approach for producing knowing of the CGS amongst banks, MSE industry associations, MSE sector, etc. through print and press news, performing workshops / seminars, going to the programmes arranged at different district / state / national fora, etc. Throughout the 12 months, CGTMSE took part in various seminars / workshops arranged by MLIs andIndustry Associations, exhibitions and conferences arranged by RBI / Govt. associated with MSE sector, around the world to produce understanding about CGS. CGTMSE officials also held company development conferences along with its Member Lending Institutions. Sustained print news promotions had been performed around the world through the to improve visibility and create awareness about the scheme year. Information dissemination promotions had been vigorously completed amongst different stakeholders.

9.2 During FY 2016, CGTMSE took part in 21 Seminars/ Workshops/ Bankers’ meet/ Business Development Meetings, and in addition made presentations to sensitize bank officials/ little enterprises from the different facets of the Credit Guarantee Scheme. The workshops/ programmes had been generally speaking arranged by the member banks / SIDBI / CGTMSE / Industry Associations, etc.

Operational Highlights of CGTMSE

10. As may 31, 2016, cumulatively 24,31,490 proposals from micro and enterprises that are small been authorized for guarantee address for aggregate credit of Rs.1,13,500.61 crore, extended by 119 active MLIs. A guarantee that is year-wise growth place is suggested into the table below:

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