Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE)

CGTMSE was set up in 2000 by Ministry of Micro, Small and Medium Enterprises, Government of India (GoI) and SIDBI with an initial committed corpus of ₹2500 crore which got augmented to ₹5000 to facilitate credit guarantee support to collateral free / third-party guarantee-free loans to the Micro and Small enterprises, who are generally considered to be a high risk lending, especially in the absence of collateral. It facilitates access to finance for un-served and under-served geographies, making availability of finance from conventional lenders to new generation entrepreneurs and under privileged, who lack supporting their loan proposal with collateral security and/or third- party guarantee.

CGTMSE introduced the Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) which guarantees credit facilities up to ₹200 lakh on automated digital platform, extended by Member Lending Institutions (MLIs) to those MSE loans, which are not backed by collateral security and / or third-party guarantees. The main objective of the scheme is that lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed. The other objective is that lender availing guarantee facility should endeavour to give composite credit (term loan and working capital facilities from single agency) to the borrowers.

In its over 18 years of operations, CGTMSE has approved over 31 lakh of guarantees covering loans amounting to over ₹1.59 lakh crore on cumulative basis. The units supported by CGTMSE have generated employment to the tune of above 1 crore and export earning of ₹9,530 crores. Approximately, 16% women and 8% SC/ST/Minorities entrepreneurs have been benefited by the scheme.

In order to cover large number of MSEs and improve the ease of delivery, there have been continuous modifications in the product line of CGTMSE. CGTMSE implemented various policy reforms such as charging of fee on outstanding loan instead of sanction amount, inclusion of retail trade as eligible activity under CGS, allowing partial collateral security, increase in the extent of guarantee coverage to 75% from existing 50% for loans above ₹50 lakh in the current guarantee scheme, which would make the scheme more attractive to the MLIs and would enable increased credit flow to the MSE Sector.

Impact of CGTMSE

As on December 31, 2018

Number of Guarantees approved


Amount of loan covered through the Guarantees approved (₹ Crore)


Estimated turnover of guarantee units (₹ Crore)


Estimated export by guarantee units (₹ Crore)


Estimated employment generation


Number of claims settled


Amount of claim settled (₹ Crore)


Guarantees to SC/ST, Women, minority entrepreneurs (% to total guarantee amount) constituted


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