Credit Guarantee Fund Trust For Micro And Small Enterprises (CGTMSE) Scheme:
The Union Minister for MSME recently launched the revamped Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Scheme.
- CGTMSE Scheme was launched in 2000 by the Government of India (GoI) to make available collateral-free credit to the micro and small enterprise sector.
- Both the existing and the new enterprises are eligible to be covered under the scheme.
- The corpus of CGTMSE is contributed by the GoI and SIDBI in the ratio of 4:1 respectively.
- The Ministry of MSMEs, and Small Industries Development Bank of India (SIDBI) established a trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the CGTMSE Scheme.
- While launching the revamp of CGTMSE, it was announced that CGTMSE will collaborate with National Institute for MSME, Hyderabad for setting up a Centre of Financial Inclusion.
- The Centre is expected to provide financial literacy and credit counselling to MSEs, thus helping them to better utilize the benefits of the CGTMSE Scheme.
- The revamped version of the CGTMSE Scheme has been provided with an additional corpus support of ₹9,000 crore in the Union Budget for FY 2023-24 to provide a guarantee for an additional ₹2 lakh crore to MSEs.
- Other major changes made is
- Reduction in guaranteed fees for loans up to ₹1 crore by 50%.
- Raising of ceiling for guarantee from ₹2 crore to ₹5 crore.
- Raising the bar for claim settlement without taking legal action from the previous limit of Rs. 5 lakhs to Rs. 10 lakhs.
