Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Quick Scheme Parameters
Who is this scheme for?
- ●Micro & Small Enterprises
- ●Startup Founders
- ●Women Entrepreneurs
- ●Manufacturing & Service Units
SEVA is an independent information directory and is not affiliated with or operated by the Government of India or any government department. Scheme eligibility, benefits, deadlines and application requirements may change. Always verify information through the relevant official government source before applying.
01 // What is CGTMSE Collateral-Free Loan Guarantee? (Overview)
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) facilitates third-party collateral-free credit from scheduled commercial banks, NBFCs, and financial institutions to new and existing micro and small enterprises by providing credit guarantee cover up to 85%.
Who Can Apply & Eligibility Requirements
- ✓New and existing Micro and Small Enterprises engaged in manufacturing or service activities
- ✓Valid Udyam Registration Certificate is mandatory
- ✓Viable project proposal evaluated and approved by Member Lending Institutions (MLIs)
- ✓Educational institutions, training centers, and IT/software service firms are fully eligible
Who is NOT Eligible?
- ✕Medium Enterprises (investment in plant > ₹10 Cr or turnover > ₹50 Cr)
- ✕Retail Trade activities exceeding single-borrower exposure limits
- ✕Educational institutions that operate on a non-commercial or trust basis without MSME registration
- ✕Units with past non-performing asset (NPA) records with existing financial institutions
02 // Benefits & Financial Assistance / Subsidy Structure
Collateral-free credit facility up to ₹500 Lakhs (₹5 Crore) with government-backed guarantee cover up to 85% and reduced annual guarantee fees.
| Beneficiary / Project Tier | Government Subsidy / Cover | Key Terms & Conditions |
|---|---|---|
| Micro Enterprises (Loans up to ₹5 Lakhs) | 85% Guarantee Cover | Designed for early micro units; minimal processing overhead and reduced guarantee fees. |
| Micro Enterprises (Loans ₹5 Lakhs to ₹50 Lakhs) | 75% to 85% Guarantee Cover | 85% guarantee cover for Women Entrepreneurs, SC/ST, and units in North-East / Aspirational Districts. |
| Small Enterprises (Loans ₹50 Lakhs to ₹500 Lakhs) | 75% Guarantee Cover | Enables established MSMEs to access substantial working capital and term loans without pledging commercial real estate. |
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03 // Required Documents Checklist
04 // How to Apply (Step-by-Step Application Process)
Obtain Udyam Registration
Register your micro or small enterprise on the central Udyam portal (udyamregistration.gov.in) to obtain your unique MSME certificate.
Prepare Project Business Plan
Compile a comprehensive project feasibility report with realistic revenue forecasts, debt service coverage ratio (DSCR), and machinery quotations.
Approach Member Lending Institution (MLI)
Apply directly with public sector banks, private scheduled banks, or SIDBI, requesting credit appraisal under the CGTMSE guarantee scheme.
Bank Credit Appraisal & Guarantee Enrolment
Upon sanctioning the credit limit, the bank directly applies to the CGTMSE trust portal to secure the guarantee cover upon payment of the annual guarantee fee.
Loan Disbursement
The bank disburses the sanctioned term loan or cash-credit limit directly to the borrower without holding physical asset title deeds.
05 // Official Government Sources & Application Portals
CGTMSE Official Portal
Central Trust portal providing guarantee calculators, eligible lender lists, and policy guidelines.
Udyam MSME Registration Portal
Mandatory government portal for MSME business registration.
myScheme National Directory
Official Government of India scheme summary and verification guidelines.
06 // Frequently Asked Questions About CGTMSE Collateral-Free Loan Guarantee
Does the borrower have to apply to CGTMSE directly?
No. The borrower applies for the loan directly with a bank or NBFC (Member Lending Institution). The lending bank evaluates the project and registers the sanctioned loan with CGTMSE on the borrower behalf.
What is the Annual Guarantee Fee (AGF) charged under CGTMSE?
The annual guarantee fee ranges between 0.37% to 1.35% of the sanctioned loan amount, depending on the loan size, enterprise category (women/SC/ST receive concessions), and lender risk grading.
Can working capital limits (Cash Credit / Overdraft) be covered under CGTMSE?
Yes. Both term loans for machinery/infrastructure and non-fund/fund-based working capital facilities (Cash Credit lines) are eligible for CGTMSE guarantee coverage.
07 // Related Government Schemes
Prime Minister Employment Generation Programme (PMEGP)
The Prime Minister Employment Generation Programme (PMEGP) is a premier credit-linked subsidy initiative launched by the Government of India to generate sustainable self-employment opportunities across manufacturing and service sectors in rural and urban areas.
Startup India Seed Fund Scheme (SISFS)
The Startup India Seed Fund Scheme (SISFS) provides financial assistance to early-stage DPIIT-recognized startups for proof of concept, prototype development, product trials, market-entry commercialization, and initial operational scaling.
MSME Sustainable (ZED) Certification Scheme
The MSME Sustainable (Zero Defect Zero Effect - ZED) Scheme incentivizes manufacturing micro, small, and medium enterprises to adopt world-class quality manufacturing processes while minimizing environmental impact.
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