To make available credit to Micro and Small Enterprises for loans up to Rs. 1 crore without collateral/ third party guarantees. CGTMSE has been set up to strengthen credit delivery system and facilitate flow of credit to the MSE sector.
Banks and financial institutions are provided funding assistance under this scheme so that they can in turn lend collateral free credit to MSMEs
The Scheme covers collateral free credit facility (term loan and/ or working capital) extended by eligible lending institutions to new and existing micro and small enterprises up to Rs. 100 lakh per borrowing unit. The guarantee cover provided is up to 75% of the credit facility up to Rs.50 lakh (85% for loans up to Rs. 5 lakh provided to micro enterprises, 80% for MSEs owned/ operated by women and all loans to NER) with a uniform guarantee at 50% of the credit exposure above Rs.50 lakh and up to Rs.100 lakh. A composite all-in Annual Guarantee Fee of 1.0 % of the credit facility sanctioned (0.75% for credit facility upto Rs. 5 lakh and 0.85% for above Rs. 5 lakh and upto 100 lakh for Woman, Micro Enterprises and units in NER including Sikkim) is now being charged.
Banks and financial institutions can apply to office of DC-MSME/MSME-DIs. for availing support. MSMEs need to directly contact the respective banks for getting credit.