Credit Guarantee Scheme Apply Online & Registration Form | Credit Guarantee Scheme Check Statistics & Eligible Beneficiaries | Credit Guarantee Scheme Check Features & Benefits | Credit Guarantee Scheme Check Empanelled Banks & Scheme Coverage | Credit Guarantee Scheme Check Eligibility & All Details |
The Credit Guarantee Scheme is a partnership between the Government of India and the Small Industries Development Bank of India (SIDBI). Its purpose is to encourage banks to provide loans to small businesses by offering guarantees for these loans. The Credit Guarantee Scheme (CGS) was launched to improve the availability of credit for small enterprises and support new entrepreneurs.
Through this article, we will provide you with all types of information about the Credit Guarantee Scheme 2023 like purpose, Eligibility Criteria, Benefits, Features, important documents, etc. Apart from this, we will share with you the process to apply online for this scheme. To get complete information about this scheme, read this article till the end.
Credit Guarantee Scheme
Now small businesses will be able to get established or set up after getting an online registration offered under the Credit Guarantee Scheme. In the past 22 years, CGTMSE has provided guarantee cover for loans worth 1 lakh crore in the last fiscal year, which is a significant achievement. This success has been the result of various initiatives implemented by CGTMSE to support the economy and promote entrepreneurship.
The Central Government or Government of India has launched the Credit Guarantee Scheme to provide guarantee cover for loan facilities up to Rs. 2 crores extended by eligible lending institutions to micro, small, and medium enterprises (MSMEs). With the help of this scheme, the MSMEs will be able to avail of credit without the need for any collateral security or third-party guarantee.
Highlights Of Credit Guarantee Scheme
The highlights of this scheme are as follows:-
| Name Of The Scheme | Credit Guarantee Scheme |
| Known As | CGTMSE |
| Launched By | Government of India |
| Delegated Ministry | Ministry of Electronics & Information Technology |
| Allocated Portal | Cgtmse Portal |
| Objective | To provide loan amounts to the borrowers to carry out business |
| Benefit | Borrowers will be able to set up their businesses |
| Applicable To | Citizens of India |
| Beneficiaries | Loan Borrowers |
| Mode Of Transfer | DBT (Direct Benefit Transfer) |
| Payment Mechanism | e-payment mechanism |
| Form of Benefit | Facilitation of Loan amount |
| Hosting Site | National Information Center (NIC) |
| Mode Of Application | Online |
| Last Date of Online Form Submission | Will be updated soon |
| Mode of application | Online |
| Office Address | Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) 1st Floor, SIDBI, Swavalamban Bhavan, C-11, G-Block, BKC, Bandra (East), Mumbai – 400 051 |
| Contact no | (022): 6722 1553 |
| Official website | www.cgtmse.in |
Objectives Of Credit Guarantee Scheme
The major objective of launching the Credit Guarantee Scheme is to provide financial support and assistance to small and medium-sized enterprises (SMEs) that may face difficulties in obtaining credit from banks or other financial institutions. With the help of this scheme, SMEs will be able to access the funds they need to grow and expand their businesses. This helps to stimulate economic development and create more job opportunities.
The second objective of the CGTMSE is to mitigate the risk faced by lenders when providing loans to SMEs. Lenders are often hesitant to lend to SMEs due to the perceived higher risk associated with them. The scheme acts as a guarantee, assuring the lenders that if the borrower defaults on the loan, a portion of the outstanding amount will be reimbursed.
Credit Guarantee Scheme Statistics
The statistics of this scheme are as follows:-
| Guarantees Approved During FY 2023 | Rs. 1,04,781 Crores |
| Growth in Coverage in Terms of Amount | 87% |
| No of Guarantees Approved During FY 2023 | 11,65,786 |
Eligible Beneficiaries
The list of eligible beneficiaries for CGTMSE is as follows:-
- Micro Enterprise
- Women Entrepreneurs/ Units located in the NE region
- All other categories of borrowers
List of Empanelled Banks
The list of empanelled banks is as follows:-
- State Bank of India (SBI)
- Punjab National Bank (PNB)
- Bank of Baroda (BoB)
- Canara Bank
- Union Bank of India
- Bank of India (BoI)
- Indian Bank
- Central Bank of India
- IDBI Bank
- Indian Overseas Bank (IOB)
- Bank of Maharashtra
- UCO Bank
- Punjab & Sind Bank
- Andhra Bank
- Corporation Bank
- Allahabad Bank
- United Bank of India
- Dena Bank
- Vijaya Bank
- Oriental Bank of Commerce (OBC)
List of Lending Institutions
The list of lending institutions is as follows under CGTMSE:-
- Scheduled Commercial Banks (SCBs)
- Regional Rural Banks (RRBs)
- Small Finance Banks (SFBs)
- Non-banking Financial Companies (NBFCs)
- Small Industrial Development Bank of India (SIDBI)
- National Small Industries Corporation (NSIC)
- North Eastern Development Finance Corporation Ltd. (NEDFi)
Important Information
Important information issued for the loan borrowers is as follows:-
- The trust provides a guarantee for a portion of defaulted loan amounts, up to 75% (or up to 85% for certain borrowers).
- The maximum guarantee amount is Rs. 37.50 lakhs for loans up to Rs. 50 lakh.
- The guarantee covers the principal amount and interest for a period of one-quarter or until the loan becomes a Non-Performing Asset (NPA) or legal action is taken (whichever is lower).
- Other charges such as penal interest, commitment charges, service charges, or any other expenses are not covered by the guarantee.
Credit Guarantee Scheme Types of Guarantees
The types of guarantees provided under CGTMSE are as follows:-
- Working Capital Guarantee:- This guarantee provides financial assistance to businesses to meet their day-to-day operational expenses, including salaries, inventory purchases, and utility bills.
- Term Loan Guarantee:- Under this guarantee, businesses can obtain long-term loans for purchasing fixed assets like machinery, and equipment, or expanding their operations.
- Letter of Credit Guarantee:- This guarantee facilitates businesses in securing trade transactions by assuring payment to suppliers or exporters on their behalf.
Credit Guarantee Scheme Coverage
Coverage offered under CGTMSE is as follows:-
- The scheme offers a specific percentage of guarantee coverage, which can vary based on the nature of the loan.
- The Credit Guarantee Scheme provides coverage for loans ranging from a few thousand to several million dollars, depending on the business’s requirements and the extent of guarantee coverage approved.
Credit Guarantee Scheme Last Date
Eligible borrowers can apply for this scheme by submitting an online registration form. The specific last date for form submission has not been announced yet. Once the selection body releases the final date, we will provide an update on this article. It is advised to patiently await the release of the last date for registration.
Potential Risks In Implementation Procedure
Some potential risks Involved in implementing CGTMSE are as follows:-
- One of the major risks is the potential default by the borrower, where they may fail to repay the loan with interest within the agreed timeframe.
- There could be challenges in properly assessing the creditworthiness of the borrowers resulting in approving loans to high-risk businesses.
- There is always a chance of fraudulent activities or misrepresentation by the businesses applying for guarantees, leading to financial losses for the Scheme.
Measures Taken to Reduce Risks
Some of the measures taken by the government to reduce the risks are as follows:-
- To minimize default risk, rigorous evaluations are conducted to assess the financial standing, repayment capacity, and previous credit history of the borrowers.
- The scheme may require borrowers to provide collateral in the form of assets or personal guarantees, reducing the risk of non-repayment.
- The Credit Guarantee Scheme may collaborate with partner banks to share the risk, helping to minimize potential losses in case of defaults.
- Regular monitoring of loan repayment ensures timely intervention to address any potential risks or issues and take appropriate actions.
- Stringent verification processes and documentation checks are implemented to minimize the risk of fraudulent activities.
Benefits Of Credit Guarantee Scheme
The benefits of this scheme are as follows:-
- This will scheme will provide access to credit for individuals or businesses who might otherwise be unable to obtain loans from traditional sources.
- It helps in promoting entrepreneurship by encouraging individuals to start their own businesses or expand existing ones.
- There will be a reduction of risk for lenders by providing a guarantee against default on loans.
- It enables small and medium-sized enterprises (SMEs) to secure loans without sufficient collateral or credit history.
- This will help in creating employment opportunities, as businesses that receive loans are able to grow and hire more employees.
- It contributes to economic growth by facilitating investment and expansion of businesses.
Features Of Credit Guarantee Scheme
The features of this scheme are as follows:-
- The Central Government has launched the Credit Guarantee Scheme.
- This scheme is also known as CGTMSE.
- A total of 20 banks that has been registered for providing loans to the borrowers.
- This scheme will offer 3 types of guarantees.
- The last date to apply online will be updated soon.
- For getting more information, one can visit the official website.
Credit Guarantee Scheme Eligibility Criteria
The applicants will need to attain the below-mentioned eligibility criteria to apply online under CGTMSE:-
- The scheme is typically available for small and medium-sized enterprises (SMEs), which may include sole proprietors, partnership firms, private limited companies, etc.
- The scheme may require the business to have been in operation for a certain period, typically ranging from 3 to 5 years. Start-ups or newly established businesses may have additional requirements or limitations.
- The business should demonstrate a satisfactory financial track record, including a positive cash flow and profitability.
- The credit guarantee may be available for specific purposes such as working capital, expansion, machinery purchase, infrastructure development, export-oriented activities, etc.
- There may be a minimum and maximum loan amount specified under the scheme. The loan amount may be determined based on the project cost, business size, credit rating, and repayment capacity.
- There may be certain requirements for collateral or security, especially for higher loan amounts or riskier businesses. This could include assets like land, building, inventory, equipment, machinery, or personal guarantees.
- The borrower’s creditworthiness and repayment history will be taken into consideration.
- The business should be compliant with statutory requirements such as tax filings, licenses, permits, and any other legal obligations.
- Non-compliance may affect the eligibility for the credit guarantee scheme.
Important Documents
Some of the important documents required to apply online for this scheme are as follows:-
- Application form
- Business details
- Project report
- Financial statements
- KYC documents
- Latest Annual Report
- Undertaking duly stamped and signed
- Compliance with the conditions of MLI registration as per applicable guidance
- Bank statements
- Income tax returns
- Collateral documentation
- Business plan
- Other documents (If Any)
Credit Guarantee Scheme Apply Online
As this scheme has been recently launched no such information has been released with the help of various social networking sites regarding the application procedure to apply online for the Credit Guarantee Scheme. Whenever the application procedure will be launched, we will update you through this article otherwise, the applicant can visit the Official Website.
To Do Members Login
The applicants will need to follow the below-mentioned point to do login:-
- The applicants will need first to visit the official website.
- Now click on the Member Login button.
- Click on any one displayed link as per your choice.
- The login form will get displayed on your screen.
- Fill in the asked details.
- Now click on the Sign In Button.
Getting Contact Details
The applicants will need to follow the below-mentioned points to get contact details under CGTMSE:-
- The applicant will need first to visit the official website.
- The homepage will get displayed on your screen.
- Now you will need to click on Contact Us.
- The contact details will get displayed on the screen.
Contact Information
In case if you have any doubts or questions coming to your mind regarding the Credit Guarantee Scheme, then you can contact the mentioned below office address and contact no:-
- Office Address:-
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- 1st Floor, SIDBI,
- Swavalamban Bhavan,
- C-11, G-Block,
- BKC, Bandra (East),
- Mumbai – 400 051
- Contact No:- (022): 6722 1553