MSME
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was jointly set up by the Ministry of Micro, Small and Medium Enterprises (MoMSME), Government of India and Small Industries Development Bank of India (SIDBI) in August 2000 to implement the Credit Guarantee Scheme (CGS). The scheme provides collateral-free credit guarantees to Member Lending Institutions (MLIs) — including scheduled commercial banks, RRBs, select NBFCs and Small Finance Banks — for loans extended to eligible Micro and Small Enterprises (MSEs) up to ₹10 crore per borrower (enhanced from ₹5 crore effective April 1, 2025). CGTMSE removes the bottleneck of collateral/third-party guarantee requirement, enabling first-generation entrepreneurs and existing MSEs to access formal credit.
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Maximum benefit: ₹10.0 Cr
Collateral-free credit guarantee for MSE loans up to ₹10 crore per borrower
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Approach a Member Lending Institution (MLI)
Visit any CGTMSE-registered bank, NBFC, or Small Finance Bank. Most scheduled commercial banks are MLIs. Confirm the branch participates in CGS.
Submit Loan Application
Apply for a term loan or working capital loan with Udyam certificate, project report, financial statements, and bank account details. No collateral is required under CGTMSE coverage.
Credit Assessment by MLI
The bank evaluates project viability and creditworthiness. It sanctions a collateral-free loan under CGS-I/II/III up to ₹10 crore.
MLI Registers Guarantee Cover
Upon sanctioning the loan, the MLI registers the account with CGTMSE on the CGTMSE portal (cgtmse.in) and pays the annual guarantee fee.
Loan Disbursement
Funds are disbursed to your account. CGTMSE guarantee cover is activated automatically upon registration by the MLI.
Repayment
Repay as per the agreed schedule. If default occurs, the MLI files a claim with CGTMSE; CGTMSE settles up to 75% of the defaulted amount.