- Collateral-free loans for MSE up to 5 Cr.
- Reduced CGTMSE fee starting at 0.37%.
- CGTMSE Hybrid Scheme – Higher Loan Limit.
- Loans available for Manufacturers, Service Providers, and Traders.
- New Addition – Education and Training Institutes.
- Expert Help from Experienced Loan Agency.
CGTMSE Scheme – Start To Be Great
Banks / NBFCs offer collateral-free loans to Micro and Small Enterprises (MSEs) with the backing of CGTMSE’s credit guarantee. Lending institutions collect an annual fee as a risk premium to cover loans that may become NPA.
Key Highlights
- Coverage Limit: 500 lakhs.
- Beneficiaries: New and existing SMEs in manufacturing, Service Sector, Trading, and Educational/Training Institutions.
- Lending Institutions: Over 100 Banks and NBFCs empanelled by CGTMSE.
- CGTMSE Hybrid Scheme: Higher loan coverage with partial security; asset secures part of the loan, and CGTMSE covers the rest.
- CGTMSE Fees: Yearly fees range from 0.37% to 2% on the reducing balance.
All lending institutions do a meticulous evaluation of loan serviceability while processing loans.
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What Does CGTMSE Do?
CGTMSE provides guarantee cover to lending institutions for collateral-free loans offered to MSEs. This encourages financial institutions to finance viable micro and small enterprises.
Who Can Apply for CGTMSE Loans?
- Sole Proprietorship firms
- Partnership firms
- Private Limited Companies
- Public Limited Companies
Which Type of Activities are Covered Under the CGTMSE Scheme?
New and existing MSMs engaged in manufacturing, service sector, trading, educational institutes, and training institutes.
Which Institutions Offer Finance?
More than 100 financial institutions are member lending institutions of CGTMSE, including Private Banks, NBFCs, PSUs, RRBs, SUCBs, FLs, SFBs, and Foreign Banks.
How Do Financial Institutions Determine CGTMSE Eligibility Limit?
The CGTMSE loan limit is determined based on the applicant's profile, reayment capacity and business needs.
Can a Borrower Take Loans from Multiple Institution?
Yes, a borrower can take loans from more than one bank/NBFC. However, the credit guarantee coverage limit is a maximum of 500 Lakh across all loans.
Does CGTMSE Guarantee Exempt Loans from Underwriting?
No. While CGTMSE covers only a percentage of the outstanding loan amount (between 50 to 85%), financial institutions still have exposure to the remaining loans.
Moreover, the reputation and asset quality of financial institutions are closely tied to NPAs. So, they underwrite loans carefully to ensure loan serviceability.
Is There an Annual Fee for CGTMSE Loans?
Yes, loans backed by CGTMSE are subject to an annual fee ranging from 0.37% to 2%, depending on the loan amount and business activity.
When Do Financial Institutions Charge This Fee?
The fee is charged annually as per sanction letter, based on the outstanding amount as of December 31st.
Is there a CGTMSE Fee Discount for Special Categories?
Yes, a 10% discount is offered for SC, ST, Women, ZED Certified Units, Units in Aspirational Districts, and physically disabled.
What is CGTMSE Hybrid scheme?
Under Hybrid Security product, loans sanctioned to MSE units with partial collateral coverage can be covered under the credit guarantee scheme of CGTMSE.
In other words, a portion of the loan that is not covered by collateral security (maximum 5Crs.) sanctioned to MSE units can be covered under CGTMSE.
What Is The Loan Tenure Under The CGTMSE Loan?
The loan tenure under the CGTMSE Loan is 5 years. Under hybrid scheme, it can be up to 10 years.
What is the loan processing time?
Loan disbursement takes 4 to 7 days working days, subject to document availability.
Checklist of Required Documents for CGTMSE.
Required documents depend on the borrower's profile, business activity, and loan purpose. Share your name for a personalized checklist.
What Is The Lock-in Period in CGTMSE?
18 months.
Can Educational / Training Institutes Take loans Under CGTMSE?
Yes, they are eligible.
Who Cannot Apply?
Self-Help Groups (SHGs) and agriculture-related activities are not eligible.
Why Choose Joy Loan for CGTMSE Loans?
Joy Loan offers specialized services and comprehensive support for your loan. We select the best lender based on your profile from top financial institutions such as HDFC Bank, Axis Bank, ICICI Bank, and more.
With us, enjoy the lowest interest rates and fabulous EMI savings, all while experiencing smooth and speedy processing.
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