Credit Guarantee Scheme Yojana

About Credit Guarantee Scheme 2017

The credit Guarantee scheme also shortly called as CGTMSE. Here CGTMSE stands for the Credit Guarantee Fund Trust for Micro and small enterprises Yojana. Indian Prime Minister Shri Narendra Modi has been launched several welfare schemes for people to improve the business sector in the nation

This Credit Guarantee scheme has recently upgraded by the central government to provide more funds for the business owners. The scheme aim of scheme offers assistance to business enterprises through different banks and financial institutions in the country.

How this Credit Guarantee scheme helpful to people?

This Credit Guarantee scheme offers the required financial assistance from Rs 5 lakh to Rs 2 crore for micro and small enterprises to establish their own business

What is the main aim of the scheme?

  • The CGTMSE aim scheme is to encourage the new entrepreneurs for implementing the new and creative ideas through SMEs
  • This scheme offers the guarantee regarding the availability of both lenders and borrowers in form of financial security
  • The business owners will provide the capital and term loan to invest in business plans

Who can eligible for this Credit Guarantee scheme?

  • For lenders: All the private and public sectors banks, rural banks, NSIC, NEDFI, and SIDBI are part of the scheme
  • For borrowers eligibility: Old and new enterprises are both eligible for availing financial assistance under the scheme

Credit Guarantee scheme rate of interest charged:

Under this scheme the interest rate to borrowers around 3% per annum as per RBI guidelines. And the borrowers have to pay the credit guarantee fee to banks as per banks rules

Fee for Guarantee:

The annual Guarantee fee 0.1% p.a. of credit facility sanctioned 0.75% credit facility up to Rs 5 lakh and 0.85% for above is now charged

Tenure of Loan:

The guarantee cover is 5 years or a block of 5 years. If the Government has stated any loss by lender or borrower fails to make the repayment of loan amount provide the 85% amount for covering up to loss

How the Credit Guarantee scheme helpful or women?

For women applicants take the loan around Rs 5 lakh to Rs 50 lakh then the scheme will provide the 80% coverage

If in case the loan is Rs 50 lakh to around Rs 100 lakh then they will give coverage of Rs 37.5 lakh along with 50 percent of the amount from the loan

Registration process under Credit Guarantee scheme:

  • Interested candidates can fill the application form through the CGTMSE official website or else get the application form for different concerned banks
  • Better before filling the form you may have to check the respective bank for eligibility
  • Along with the application, form candidates need to submit the business plan by the applicant
  • And the applicant has to try and obtain the sanction of the loan amount from the respective bank
  • The loan amount is sanctioned by the bank and the applicant has to obtain coverage under the scheme

Where can you apply for Credit Guarantee scheme?

There are nearly 130 different nationalized and private banks that provide the financial help to enterprises. SBI and other state banks, ICIC and other banks from both the public and private sector are involved under the scheme

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