The government’s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which provides guarantees to banks for collateral-free loans to micro and small enterprises (MSEs), has achieved the 1 crore guarantee mark. The fund, launched in 2000, enables collateral-free loans up to a limit of Rs 5 crore to MSEs with guarantee coverage up to 85 per cent for various categories of loans under the credit guarantee scheme.
The three prominent member lending institutions that played a significant role in hitting 1 crore guarantees were State Bank of India, HDFC Bank and Union Bank, CGTMSE said in a statement on Tuesday.
Across India, the maximum number of approved guarantees were recorded in Uttar Pradesh with 11.61 lakh guarantees followed by Tamil Nadu (7.92 lakh), Andhra Pradesh (7.78 lakh), Maharashtra (7.70 lakh), Karnataka (7.26 lakh), and others, as of October 31, 2024, according to the data shared on November 28 in the Parliament by Shobha Karandlaje, Minister of State in the MSME Ministry.
The highest amount approved in guarantees was Rs 90,376 crore in Maharashtra, Rs 76,997 crore in Uttar Pradesh, Rs 63,950 crore in Gujarat, Rs 59,651 crore in Karnataka, Rs 58,911 crore in Tamil Nadu, and Rs 43,145 crore in West Bengal.
The total amount approved in guarantees as of October 31, 2024, stood at Rs 7.58 lakh crore.
To boost affordable credit access to MSEs, the government is targetting Rs 5 lakh crore guarantees in the next two years under CGTMSE, Dr Rajneesh, Additional Secretary and Development Commissioner (MSME), Ministry of MSME had said at an event in September this year.
“In a span of 22 years, the cumulative credit guarantees extended by CGTMSE amount was 2.6 lakh crores. But in last 2 years, we have been able to give credit guarantees worth of Rs 4 lakh crore and in the next 2 years we intend to ramp it up to another Rs 5 lakh crore,” Rajneesh had said.
Importantly, the credit guarantee amount approved had doubled in FY24 to Rs 2 lakh crore, the highest ever in a single FY vis-a-vis Rs 1.04 lakh crore in FY23 and Rs 56,172 crore in FY22.
In September, MSME Minister Jitan Ram Manjhi had announced an increase in CGTMSE guarantee coverage for women-owned MSEs to 90 per cent, targeting 27 lakh women beneficiaries.