The credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) by the government, which provides guarantee cover to lenders for collateral-free loans to eligible MSMEs, has doubled in the financial year 2023-24 from the previous fiscal.
According to the data shared by CGTMSE in a post on X (formerly Twitter), Rs 2 lakh crore guarantees were approved in FY24, the highest ever in a single FY. In FY23, the total amount in guarantees approved was Rs 1.04 lakh crore across 11.65 lakh guarantees and Rs 56,172 crore across 7.17 lakh guarantees in FY22, FE Aspire had reported in July 2023.
“We believed we could and we did it again! Rs. 2 lakh crore guarantee on FY2023-24, highest ever in a single FY. A testament to the growth and success of #CGTMSE,” the post said.
The scheme had achieved the Rs 1 lakh crore loan guarantee mark in seven months (April-October) of the current fiscal vis-a-vis Rs 1.04 lakh crore guarantees in the entire FY23.
To expand the coverage of the scheme with loans up to Rs 20 lakh, MSME Minister Narayan Rane in February this year had launched a special scheme for informal micro enterprises (IMEs) exempted from the Goods and Services Tax (GST) regime.
According to a circular by CGTMSE, up to 85 per cent guarantee cover is provided to lenders for unsecured loans up to Rs 20 lakh to IMEs registered on the Udyam portal.
“The widespread adoption of the guarantee mechanism by lenders has come about due to a number of initiatives taken by CGTMSE like reduction in guarantee fee, raising the eligibility limit of loans for guarantee, relaxing the pre-condition for claim settlement, end-to-end digitisation of the operations leading to “ease of doing business” by the lenders, etc.,” MSME Ministry said in a statement in February this year.
Importantly, in April last year, Rane had launched the revamped CGTMSE scheme with an additional corpus support of Rs 9,000 crore in the FY24 budget to provide guarantees for additional Rs 2 lakh crore to micro and small enterprises.