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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Ccgtmse Guarantee, Letter of credit etc facilities extended by the lending institution to the eligible borrower. The balance 25 per cent of the guaranteed amount will be paid on conclusion of recovery proceedings by the lending institution.

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.

After the approval comes through the business will have to pay the borrowers will have to pay the CGTMSE guarantee and service fee. Updated on Jul 02, – Log In Sign Up.

In the event of non-payment of annual service fee by May 31 of that year or any other specified date, the guarantee under the scheme shall not be available to the lending institution unless the Trust agrees for cgttmse of guarantee and the lending institution pays penal interest on the service fee due and unpaid, with effect from the subsequent June 01, at four per cent over Bank Rate, per annum, or at such rates specified by the Trust from time to time, for the period of delay.

Guarantee Fee and Annual Service Fee.

Get expert assistance in managing your business. The guarantee in respect of that credit facility was in force at the time of account turning NPA.

CGTMSE Scheme – Coverage of Collateral Free Loans to SME | Bank of Baroda

In the event of any representation made by the lending institution in this regard, the Trust shall take a decision based on the available information with it and the clarifications received from the lending institution, and its decision shall be final and binding on the lending institution. 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 provide guarantee as under: Above 50 lakh upto lakh.

These industries form the very backbone of our Indian Economy.


Micro and small enterprise which are operated and owned by women entrepreneurs. Extent of the guarantee.

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 cgtkse for recovery of the amount.

List Of Member Lending Schee. 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. Subrogation of rights and recoveries on account of claims paid. The lending institution shall exercise all the necessary precautions and maintain its recourse to the borrower for entire amount of credit facility owed by it and initiate such necessary actions for recovery of the outstanding amount, including such action as may be advised by the Trust.

Responsibilities of lending institution under the scheme: 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 – Credit Guarantee Fund Trust for Micro and Small Enterprises

The following credit facilities shall not be eligible for being guaranteed under the Scheme: All other category of borrowers. Trust’s liability to be cvtmse in certain cases. In this article, we will learn more about this fund. All proposals for sanction of guarantee approvals for credit facilities above Rs. Maximum extent of Guarantee where credit facility is. However, notwithstanding the death or retirement of a partner where the borrower is a partnership firm or the death of one of the joint borrowers, if the lending institution is entitled to continue the credit facilities to the surviving partner or partners or the surviving borrower or borrowers, as the case may be and if the credit facilities have not already become non performing asset, the guarantee in respect of such credit facilities shall not to be deemed to be cgtms as provided in this paragraph.

CGTMSE has introduced a new “Hybrid Security” product allowing guarantee cover for the portion of credit facility not covered by collateral security. Plans start from Rs.

Supplementary and general provisions.

Sikkim other than credit facility upto Rs. Credit facilities not eligible under the Scheme. List Of Member Lending Instiutions. As per this scheme, a loan of up to Rs. The tenure of the guarantee is a block of 5 years. If any question arises in regard to the interpretation of any of the provisions of the Scheme or of any directions or instructions or clarifications given in connection therewith, the decision of the Trust shall be final.


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.


Subject to the other provisions of the Cggtmse, the Trust undertakes, in relation to credit facilities extended to an eligible borrower from time to time by an eligible institution which has entered into the necessary agreement for this purpose with the Trust, to provide a guarantee on account of the said credit facilities.

Loans are also provided to borrowers who are located in the Northeastern States of India including Sikkim and Jammu and Kashmir. CGTMSE will, however, have pari-passu charge on the primary security as well as on the collateral security provided by the borrower for the credit facility. The Trust shall not exercise any subrogation rights and that the responsibility of the recovery of dues including cgtmwe of assets, sale of assets, etc.

From 10 lakh upto lakh. 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. In particular, the lending institution should intimate the Trust while entering into any compromise or arrangement, which may have effect of discharge or waiver of personal guarantee s or security.

Credit facilities eligible under the Scheme: The cgt,se received from the lending institutions shall be appropriated in the order in which the service scgeme, penal interest and cgtmee charges have fallen due. Invest in best performing Mutual funds for building long term wealth. The credit facility has been recalled and the recovery proceedings have been initiated under due process of law.

Appropriation of amount realised by the lending institution in respect of a credit facility after the guarantee has been invoked.