Credit Guarantee Trust for Medium and Small Entrepreneurs (CGTMSE)

The central government has launched several schemes to promote women entrepreneurship in the country as well as boost the Micro, Small and Medium Enterprises. One such schemes is the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). It has operated by the MSME Ministry in collabroation with the Small Industries Development Bank of India (SIDBI). Under this scheme, the agencies offer credit guarantee to financial institutions to provide collateral-free loans to MSEs. As per the recent government data, under this scheme guarantee of Rs 45,215.35 crore in 8,38,947 loan accounts have been approved in fiscal year 2020. 4,35,520 accounts were extended guarantee under the scheme in the previous financial year. Union Budget 2021: Here Is What the First Paperless Budget Has In Store for the MSME Sector.

As many as 67,171 loan accounts of female entrepreneurs totaling to Rs 3,366.63 Crore have been approved under the scheme in the current financial year. Women entrepreneurs in Tamil Nadu got the maximum approval of Rs 394.50 crore on 8,593 accounts. It was followed by Uttar Pradesh where 6,289 accounts were approved for Rs 334.59 crore). Madhya Pradesh with 5,927 accounts approvals for Rs 215.42 crore and , Andhra Pradesh with 5,208 approvals for Rs 143.16 crore stood third and forth respectively. Meanwhile, 4,776 accounts were provided guarantee for Rs 295.22 crore in Karnataka . MSMEs in India: Govt Aims To Raise MSME Sector’s Share in GDP to 40% From the Current 30% To Benefit Rural Poor, Says Nitin Gadkari.

Continuing its efforts to develop and promote the MSMEs in India, the Union Budget 2021 also provided a share fair of public expenditure to the sector. In the budget for the upcoming financial year, Finance Minister Nirmala Sitharaman has allocated a fund of over Rs 15,000 Crore to the Micro, Small and Medium Enterprises, which stands at double the amount apportioned to the sector last fiscal. “We have taken a number of steps to support the MSME sector in this budget. I have provided Rs 15,700 crore more than double the previous year,” said the Finance Minister

New Delhi, August 19: Prime Minister Narendra Modi-led Union Government on Wednesday operationalised Rs 20,000 crore stressed fund aiming to benefit around 2 lakh MSMEs. Apart from this, the Union government has also issued guidelines for Credit Guarantee Scheme for Subordinate Debt (CGSSD) which was announced under the Atmanirbhar Bharat package.

According to the plan of the government, the subordinate debt that will be provided by the banks would be fully guaranteed through the Credit Guarantee Trust for Medium and Small Entrepreneurs (CGTMSE) and be counted as quasi-equity. In the subordinate debt, support of Rs 4,000 crore would be given by the government to CGTMSE. Through the CGSSD, a guarantee coverage will be provided for MSME restructuring. Under the scheme, 90 per cent guarantee will be covered by the trust, while 10 per cent will be covered by the concerned promoter.

Here’s the MSME tweet:

Govt. has given yet another facility for financially stressed MSMEs. The sub-debt scheme has been launched. All preparation is done. All PSU Banks and some Pvt Banks are on board. Contact your bank & be #msmetochampions. @FinMinIndia @DFS_India @CGTMSEOfficial

1/2 pic.twitter.com/zqGYfFwrVA

— Ministry of MSME (@minmsme) August 19, 2020

Who are eligible for CGSSD?

1) MSMEs whose accounts have been standard as on March 31, 2018, with regular operations — standard or NPA — through FY 2019.

2) Stressed MSME units which were SMA-2 and NPA as of April 30, 2020.

Requirements for availing sub-debt under CGSSD:

1) After fulfilling the eligibility criteria, all the promoters of the MSME units will be given credit equal to 15 per cent of stake in the company or Rs 75 lakh.

2) A separate loan account needs to be opened. All the promoters will have to infuse sub-debt or loan amount as promoter contribution.

3) As per RBI norms, all MSME loans would be linked to an external benchmark.

4) The maximum tenor for repayment will be 10 years, with a 7-year moratorium on principal payment.

5) Following the completion of the moratorium, principal amount to be repaid within 3 years. However, no additional charge will be levied in case of pre-payment of the loan.