What is govt’s CGTMSE collateral-free loan scheme for SMEs?

What is govt’s CGTMSE collateral-free loan scheme for SMEs?

The CGTMSE is a central government scheme to provide guarantee to banks for collateral-free loans up to Rs 5 crore given to micro and small enterprises (MSEs).

The CGTMSE is a central government scheme to provide guarantee to banks for collateral-free loans up to Rs 5 crore given to micro and small enterprises (MSEs).

Introduced in July 2000 with an initial outlay of Rs 2,500 crore from the government and SIDBI, the scheme was later strengthened with an additional Rs 5,000 crore.

Introduced in July 2000 with an initial outlay of Rs 2,500 crore from the government and SIDBI, the scheme was later strengthened with an additional Rs 5,000 crore.

All new and existing MSEs in manufacturing or service activity excluding agriculture, and self-help groups (SHGs) can seek loans with CGTMSE cover.

All new and existing MSEs in manufacturing or service activity excluding agriculture, and self-help groups (SHGs) can seek loans with CGTMSE cover.

A loan can be raised by more than one bank and/or financial institution jointly and/or separately up to Rs 5 crore subject to the ceiling amount of individual lenders.

A loan can be raised by more than one bank and/or financial institution jointly and/or separately up to Rs 5 crore subject to the ceiling amount of individual lenders.

For loans up to Rs 5 lakh, the guarantee cover for micro-enterprises is up to 85 per cent, for loans between Rs 5 lakh and Rs 5 crore, the cover is up to Rs 75 per cent.

For loans up to Rs 5 lakh, the guarantee cover for micro-enterprises is up to 85 per cent, for loans between Rs 5 lakh and Rs 5 crore, the cover is up to Rs 75 per cent.

For women entrepreneurs/ SC-ST entrepreneurs, the guarantee cover is up to 85 per cent for loans up to Rs 5 crore.

For women entrepreneurs/ SC-ST entrepreneurs, the guarantee cover is up to 85 per cent for loans up to Rs 5 crore.

For MSEs based Northeast region, Jammu & Kashmir and Ladakh, the cover limit is up to 80 per cent for loans up to Rs 50 lakh and up to 75 per cent for loans between Rs 50 lakh and Rs 5 crore.

For MSEs based Northeast region, Jammu & Kashmir and Ladakh, the cover limit is up to 80 per cent for loans up to Rs 50 lakh and up to 75 per cent for loans between Rs 50 lakh and Rs 5 crore.

MSEs seeking guarantee cover under CGTMSE for collateral-free credit will have to provide their Udyam registration number.

MSEs seeking guarantee cover under CGTMSE for collateral-free credit will have to provide their Udyam registration number.

Earlier, the scheme had added microfinance institutions to the list of member lending institutions including public and private banks, regional rural banks, foreign banks, small finance banks, urban cooperative banks, and other MLIs in lending to new enterprises.

Earlier, the scheme had added microfinance institutions to the list of member lending institutions including public and private banks, regional rural banks, foreign banks, small finance banks, urban cooperative banks, and other MLIs in lending to new enterprises.

CGTME loan application along with passport-size photos, business project report, business registration certificate, CGTMSE loan coverage letter, and loan approval copy from the bank.

CGTME loan application along with passport-size photos, business project report, business registration certificate, CGTMSE loan coverage letter, and loan approval copy from the bank.

Image source : Pixabay

Image source : Pixabay