The Ministry of Micro, Small & Medium Enterprises (MSME), Government of India, is actively promoting the Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE) to empower first-generation entrepreneurs and foster self-employment opportunities. This flagship initiative aims to enhance access to formal credit for Micro and Small Enterprises (MSEs) by providing credit guarantee support for collateral-free loans.
According to the Ministry, the scheme allows eligible MSEs to obtain financial assistance without the need for traditional collateral or third-party guarantees. Under the CGTMSE, businesses can secure loans of up to ₹10 crore. The guarantee coverage under the scheme ranges from 75% to 90%, depending on the borrower’s profile and risk assessment. This structure aims to reduce the risk for lenders while encouraging credit flow to the sector.
The scheme is open to both existing and new MSEs, offering a significant opportunity for entrepreneurs to access credit. To avail of this benefit, applicants must approach Member Lending Institutions (MLIs), which include a wide network of banks and Non-Banking Financial Companies (NBFCs) that are part of the CGTMSE framework.
According to ministry estimates, India has around 26 million micro and small enterprises, which collectively provide employment to approximately 60 million people. The CGTMSE plays a crucial role in supporting these enterprises by facilitating ease of borrowing and enabling job creation through self-employment and enterprise growth.
The CGTMSE scheme was formally launched on August 30, 2000 and became operational from January 1, 2000. The scheme’s corpus is jointly contributed by the Government of India and SIDBI in a 4:1 ratio, demonstrating a strong public-private partnership in supporting MSMEs.
As of July 1, 2025, loans amounting to ₹10,26,145 crore have been approved under the CGTMSE, covering over 1.2 crore guarantees. Among the states, Maharashtra leads with the highest approved loan amount of ₹1,26,521 crore, followed by Uttar Pradesh at ₹1,04,856 crore, and Gujarat at ₹85,160 crore.
This extensive reach and impact highlight CGTMSE’s pivotal role in enabling financial inclusion and entrepreneurial development across India.
(From ANI)
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