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    Introduction To Credit Guarantee

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    ssr68
    The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was launched by the Government of India and Small Industries Development Bank of India to provide credit guarantees for bank loans to micro and small enterprises. The CGTMSE offers guarantees ranging from 75% to 85% of credit facilities to encourage lending to viable small business projects. Eligible lenders can apply for guarantees on new or existing loans up to Rs. 1 crore, with maximum guarantees of Rs. 65 lacs or 85% for loans up to Rs. 5 lacs to micro enterprises.

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    Introduction To Credit Guarantee

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    ssr68
    55 views1 page
    The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was launched by the Government of India and Small Industries Development Bank of India to provide credit guarantees for bank loans to micro and small enterprises. The CGTMSE offers guarantees ranging from 75% to 85% of credit facilities to encourage lending to viable small business projects. Eligible lenders can apply for guarantees on new or existing loans up to Rs. 1 crore, with maximum guarantees of Rs. 65 lacs or 85% for loans up to Rs. 5 lacs to micro enterprises.

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    This document gives an introduction to credit guarantee for SMEs

    Original Title

    Introduction to Credit Guarantee

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    The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was launched by the Government of India and Small Industries Development Bank of India to provide credit guarantees for bank loans to micro and small enterprises. The CGTMSE offers guarantees ranging from 75% to 85% of credit facilities to encourage lending to viable small business projects. Eligible lenders can apply for guarantees on new or existing loans up to Rs. 1 crore, with maximum guarantees of Rs. 65 lacs or 85% for loans up to Rs. 5 lacs to micro enterprises.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    55 views1 page

    Introduction To Credit Guarantee

    Uploaded by

    ssr68
    The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was launched by the Government of India and Small Industries Development Bank of India to provide credit guarantees for bank loans to micro and small enterprises. The CGTMSE offers guarantees ranging from 75% to 85% of credit facilities to encourage lending to viable small business projects. Eligible lenders can apply for guarantees on new or existing loans up to Rs. 1 crore, with maximum guarantees of Rs. 65 lacs or 85% for loans up to Rs. 5 lacs to micro enterprises.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    CREDIT GUARANTEE FUND TRUST FOR MICRO AND SMALL ENTERPRISES

    Bank credit for micro and small enterprises is a lifeline for their businesses. An absolute must, which
    is enabled with the help of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGFTMSE).
    Government of India launched the Credit Guarantee Scheme under the management of Ministry of
    Micro, Small and Medium Enterprises (MSME). The credit guarantee scheme was operationalised
    when Government of India and Small Industries Development Bank of India (SIDBI) together set up
    CGTMSE.
    The primary purpose of this scheme is to encourage lenders, when they evaluate the proposals to
    give primary importance to the viability of the projects and the security to be primarily the assets that
    are financed. Next, the lender that is availing the guarantee should be in a position to fund both the
    term loan and working capital facilities for the MSME. The CGTMSE offers guarantee in the range of
    75% to 85% of the credit facility.
    It is pertinent to mention here that the lender that needs the guarantee should be in the approved list
    of lenders with CGTMSE. The list of approved lenders is here:

    http://www.cgtmse.in/List_Of_MLIs.aspx

    Guarantee can be provided for new and existing MSME and also service enterprises. The maximum
    credit cap is Rs.1 crores.

    The guarantee cover is available to the extent of 75% or 80% of the sanctioned amount of the facility.
    The maximum guarantee cover is Rs. 65 lacs (Rs. 6.5 million). For micro enterprises, the extent of
    guarantee cover is 85% and for credit upto Rs. 5 lacs (Rs. 0.5 million).
    For women-owned micro and small enterprises and for credits given in the North Eastern Region, the
    guarantee cover available is 80%.
    The lender should cover immediately after sanction, the eligible facilities under the guarantee. It works
    on a calendarised schedule, whereby the lender applies for guarantee cover in respect of eligible
    credits in one calendar quarter, latest by the end of the next calendar quarter. The commencement of
    guarantee would happen from the date from the guarantee fee is paid by the lender. The guarantee
    will run through the full agreed tenure for term loans and for upto 5 years for working capital facilities.

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