CGTMSE
Credit Guarantee Fund Trust for Micro and Small Enterprises
Credit guarantee scheme that allows banks and NBFCs to give collateral-free loans to micro and small enterprises, with government-backed guarantee cover on the sanctioned credit.
Who Can Apply?
Enterprise Type
New or existing micro and small enterprises engaged in manufacturing or services, as per MSME definition.
Collateral-Free Facility
Credit facilities extended without third‑party guarantee or collateral security (hybrid models allowed for part‑secured loans).
Loan Amount Limit
Fund and non‑fund based facilities up to ₹10 crore per eligible borrower can be covered under the scheme.
Lending Institution
Loan must be sanctioned by a CGTMSE‑registered bank, SFB, or NBFC classified as Member Lending Institution (MLI).
Standard Account
Credit facility should be standard and regular at the time of guarantee application, as per RBI norms.
Constitution
Proprietorship, partnership, LLP, company, and other eligible MSME constitutions as permitted by CGTMSE guidelines.
Key Features
Collateral-Free Loans
Enables banks and NBFCs to sanction MSME loans without asking for collateral or third‑party guarantee, backed by CGTMSE cover.
High Credit Limit
Covers fund and non‑fund based credit facilities up to ₹10 crore per eligible borrower under the guarantee scheme.
Higher Cover for Women
Women and some special category borrowers can get enhanced guarantee cover compared to standard borrowers.
Wide Sector Coverage
Applicable to a broad range of manufacturing and service activities, including traders as per updated guidelines.
Risk Protection for Lenders
Guarantee cover of around 75–85% of the sanctioned amount reduces default risk for lending institutions.
Fast Guarantee Activation
Guarantee is typically approved quickly after the MLI applies and pays the guarantee fee, making processing smoother.
Scheme Benefits
Application Process
Choose MLI & Discuss Requirement
Approach a CGTMSE‑registered bank or NBFC and discuss your MSME funding need, project, and repayment capacity.
Prepare Project Report & Documents
Prepare business plan, financial projections, KYC, registrations, and other documents as required by the lender.
Loan Appraisal & Sanction
Lender appraises your proposal, sanctions the loan as per its credit policy, and decides to cover it under CGTMSE.
Guarantee Cover & Disbursement
Lender applies on CGTMSE portal, pays guarantee fee, and activates cover; loan is disbursed as per terms.
Documents Required
Frequently Asked Questions
What is the maximum loan amount under CGTMSE?
Credit facilities up to around ₹10 crore per eligible borrower can be covered under the CGTMSE guarantee, subject to scheme and lender guidelines.
Do I need to provide collateral for a CGTMSE loan?
The core objective is to provide collateral‑free credit. In pure CGTMSE coverage, no third‑party guarantee or collateral is taken, though hybrid models may allow partial security.
Who is eligible for CGTMSE coverage?
New and existing micro and small enterprises in manufacturing and services that obtain loans from CGTMSE‑registered lenders and meet the scheme’s eligibility norms.
Is the entire loan amount guaranteed?
No. The guarantee cover is typically in the range of 75–85% of the sanctioned amount, depending on borrower category and loan slab.
How do I apply for a loan under CGTMSE?
You do not apply directly to CGTMSE. You apply to a bank or NBFC; if your proposal is viable, the lender sanctions the loan and separately obtains guarantee cover from CGTMSE.
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