New Delhi [India], July 23 (ANI): The Ministry of Micro, Small and Medium Enterprises (MSME) implements the Credit Guarantee Scheme (CGS) for Micro Small Enterprises (MSEs) through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Union Minister of State for MSME, Shobha Karandlaje, informed this in Lok Sabha as a written reply to a question on Thursday.
She said that “the aim is to provide credit guarantees for the credit facilities extended to MSEs, including first-generation entrepreneurs, women-led enterprises, and units located in backward districts, without collateral security or third-party guarantees, across the Country.”
“To improve the credit flow and enhance awareness of the CGTMSE scheme among MSEs, the government has taken many measures. The guarantee ceiling for the loan extended under CGS was enhanced from Rs. 5 crore to Rs. 10 crore w.e.f 01.04.2025. Annual Guarantee Fees (AGF) structure has also been revised with 50 per cent reduction in the standard rate to as low as 0.37 per cent per annum,” the minister stated in her written reply.
She also said that “Extent of guarantee has also been enhanced for MSEs led by special category, including women-led MSEs. As per Reserve Bank of India’s Master Direction – Lending to Micro, Small & Medium Enterprises (MSME) Sector dated 09.02.2026, all Scheduled Commercial Banks are mandated not to accept collateral security in the case of loans up to Rs.20 lakh extended to units in the MSE sector.”
“To promote credit flow to MSEs in Identified Credit Deficient Districts (ICDD) as per RBI, CGTMSE offered a 10 per cent discount on the AGF and extended an additional 5 per cent guarantee coverage. A special guarantee scheme “Tamil Nadu Credit Guarantee Scheme (TNCGS)” in collaboration with the Government of Tamil Nadu is being implemented. The aim of this scheme is to provide enhanced guarantee coverage for credit facilities extended by Member Lending Institutions (MLIs) to the MSEs engaged in the Manufacturing Sector situated in the State of Tamil Nadu,” reads the written reply of MoS.
Karandlaje also said that “the performance of banks under the CGTMSE Scheme and the overall flow of credit to the MSME sector are reviewed periodically in the State Level Bankers’ Committee (SLBC) meetings. Ministry of MSME, through its field offices, regularly organises outreach programmes in coordination with MSME/ Industry Departments of States/UTs concerned and other stakeholders like CGTMSE, SIDBI, SLBC, Banks, MSME Associations etc., to create awareness of the Scheme.” (ANI)
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