There are many government-sponsored schemes for MSMEs and the CGTMSE is one of them. Learn more about this scheme here. CGTMSE introduced the Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) which guarantees credit facilities up to INR lakh on. The CGTMSE Scheme is an important schemes that every Indian Entrepreneurs and Business Owners must know about and understand. To start and manage a.

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All credits or schee given to the North eastern states of India including the state of Sikkim. The main objective is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed.

The Trust shall not exercise any subrogation rights and that the responsibility of the recovery of dues including xcheme of assets, sale of assets, etc. The amount due and payable schems the lending institution in respect of the credit facility has not been paid and the dues have been classified by the lending institution as Non Performing Assets.

Appropriation of amount realised by the lending institution in respect of a credit facility after the guarantee has been invoked. In this article, we will learn more about this fund. The following credit facilities shall not be eligible for being guaranteed under the Scheme: The Trust reserves the discretion to accept or reject any proposal referred by ctgmse lending institution which otherwise satisfies the norms of the Scheme.

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Guarantee Fee and Annual Service Fee. A special preference is given to the women entrepreneurs who are eligible for this scheme. Scheme has ended on Dec 31 The lending institution shall also ensure either through a stipulation in an agreement with the borrower or otherwise, that it shall not create any charge on the security held in the account covered by the guarantee for the benefit of any account not covered by the guarantee, with itself or in favour of any other creditor s without intimating the Trust.

On a claim being paid, the Trust shall be deemed to have been discharged from all its liabilities on account of the guarantee in force in respect of the borrower concerned. List Of Member Lending Instiutions. Extent of the guarantee.


Micro and small enterprise which are operated and owned by women entrepreneurs.

Agreement to be executed by the lending institution. The Trust shall pay to the lending institution interest on the eligible claim amount at the prevailing Bank Rate for the period of delay beyond 30 days. All other category of borrowers. The lending institution shall pay such penal interest, when demanded by the Trust, from the date of the initial release of the claim by the Trust to the date of refund of the claim.

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CGTMSE – Credit Guarantee Fund Trust for Micro and Small Enterprises

For the purposes of this Scheme. List Of Member Lending Instiutions. If any question arises in regard to the interpretation of any of the provisions of the Scheme or of schemd directions or instructions or clarifications given in connection therewith, the decision of the Trust shall be final. How can one opt for this scheme?

For the purpose of calculation of guarantee fee, the “credit facility extended” shall mean the amount of financial assistance committed by the lending institution to the borrower, whether disbursed or not. Any amount found to have been paid in excess would be refunded by the Trust. Responsibilities of lending institution under the Scheme. These industries form the very backbone of our Indian Economy.

Above 50 lakh upto lakh.

Loans are also provided to borrowers who are located in the Northeastern States of India including Sikkim and Jammu and Kashmir. A lending institution shall not be entitled to a guarantee in respect of any eligible credit facility granted by it unless it has entered into an agreement with the Trust in such form as cgtmsee be required by the Trust for covering by way of guarantee, under the Scheme all the eligible credit facilities granted by the lending institution, for which provision has been made in the Scheme.

In respect of any matter not specifically provided for in this Scheme, the Trust may make such supplementary or additional provisions or issue such instructions or clarifications as may be necessary for the purpose of the Scheme.

Further the lending institution shall secure for the Trust or its appointed agency, through a stipulation in an agreement with the borrower or otherwise, the right to list the defaulted borrowers’ cttmse and particulars on the Website of the Trust. Bank Guarantee, Letter of credit etc facilities extended by the lending institution to the eligible borrower.


Responsibilities of lending institution under the scheme: The guarantee in respect of that credit facility was in force at the time of account turning NPA. Every officer or other employee of the lending institution or the borrower, who is in a position to do so, shall make available to the officers of the Trust or SIDBI or the person appointed for the inspection as the case may be, the books of account and other records and information which are in his possession.

As per this scheme, a loan of up to Rs.

Where working capital alone is extended to the eligible borrower, the guarantee cover shall be for a period of 5 years or a block of 5 years, or for such period as may be specified by the trust in this behalf.

Where subsequent to the Trust having released a sum to the lending institution towards the amount in default in accordance with the provisions contained in the Section 10 of this scheme, the lending institution recovers money subsequent to the recovery proceedings initiated by it, the same shall be deposited by the lending institution with the Trust, after adjusting towards the cost incurred by it for recovery of the amount.

CGTMSE – Credit Guarantee Fund Trust for Micro and Small Enterprises

The credit facility has been recalled and the recovery proceedings have been initiated under due process of law. For the cgtmes above Rs.

Proposals approved by the MLIs on or after December 8, will be eligible for the coverage upto Rs. In case the MLI is not in a position to take any of the action indicated in Section 13 4 of the aforesaid Act, they may initiate fresh recovery proceeding under any other applicable law and seek the claim for first installment from the Trust.

CGTMSE has introduced a new “Hybrid Security” product allowing guarantee cover for the portion of credit facility not covered by collateral security. These are small-scale industries which require immunity and special protection to flourish.

Last modified: April 24, 2020