Credit Guarantee Scheme for MSMEs (CGTMSE)

Ministry of Micro, Small and Medium Enterprises (MSME)

CGTMSE provides credit guarantee support to eligible Micro and Small Enterprises to help them access loans without collateral or third-party guarantees.

Eligibility Criteria

Applicable to Micro and Small Enterprises (MSEs) – New or existing units
Must have valid Udyam Registration
Business Coverage: Manufacturing sector and Service sector
Loan & Lender Conditions – Loan must be availed from Scheduled Commercial Banks, Regional Rural Banks (RRBs), NBFCs, SIDBI / NSIC / NEDFi
Maximum eligible credit facility: up to ₹5 crore
Existing units must have Standard (non-NPA) loan accounts and Proven business viability
Loans must be collateral-free and covered under CGTMSE by the lending institution

Benefits

Credit Guarantee Coverage: Up to 85% coverage (for micro loans up to ₹5 lakh), around 75% coverage for general cases
Credit Guarantee Coverage – Up to 90% coverage for Women entrepreneurs, SC/ST entrepreneurs, Agniveers, Units in aspirational districts
Collateral-free loans up to ₹2 crore (standard coverage range)
Reduced Annual Guarantee Fee (AGF): Starts from ~0.37% for smaller loans
Supports Working capital, Term loans, expansion and new ventures
Improves credit access for MSMEs
Encourages lenders through risk mitigation mechanism

How to Apply

No direct application to CGTMSE
Prepare Business plan/project report, financial documents, and KYC
Approach a Member Lending Institution (MLI) – Bank or NBFC registered under CGTMSE
Submit loan application and request CGTMSE coverage
Bank evaluates and sanctions the loan
Lending institution – Registers the loan under the CGTMSE portal and pays the guarantee fee to the Trust
Loan is disbursed after approval