• UGI USER
  • May 02, 2023
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Credit Guarantee Fund Trust For Micro And Small Enterprises (CGTMSE) Scheme

News: The updated Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Scheme was recently introduced by the Union Minister for MSME.

The Government of India (GoI) introduced the CGTMSE Scheme in 2000 to provide collateral-free loans to the micro- and small-enterprise sector.

Existing and new businesses can apply to have their operations covered by the programme.

The GoI and SIDBI both provide a corpus to the CGTMSE in a ratio of 4:1.

To carry out the CGTMSE Scheme, the Ministry of MSMEs and the Small Industries Development Bank of India (SIDBI) established a trust called the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

It was disclosed that CGTMSE will work with the National Institute for MSME, Hyderabad, to establish a Centre for Financial Inclusion as part of the revamping of CGTMSE.

The Centre is anticipated to help MSEs better utilise the advantages of the CGTMSE Scheme by offering financial education and credit advice.

The Union Budget for FY 2023–24 allocated an additional 9,000 crore in corpus assistance for the redesigned CGTMSE Scheme to provide a guarantee for an additional 2 lakh crore to MSEs.

Other significant adjustments include a 50% reduction in guaranteed costs for loans up to Rs. 1 crore.

Raising the maximum amount of the guarantee from 2 to 5 crore.