Credit Guarantee Scheme Online Registration | Credit Guarantee Scheme Login Process | Credit Guarantee Scheme Application Form | CGTMSE Scheme Apply Online
In order to show their support to the entrepreneur, the Indian government introduces different types of schemes. These programs provide entrepreneurs with financial support to help them grow their businesses. Recently, the Indian government introduced a loan guarantee system. Bank loans are made available to entrepreneurs through this program. So that they can achieve their dream of fielding units. This article covers all the important aspects of the CGTMSE program. In this article you will learn how to use this system. In addition, you will get details about the objective, benefits, characteristics, eligibility, required documents, application process, etc.
About the Credit Guarantee Scheme 2022
The Indian Ministry of Small and Medium Micro Enterprises has introduced a Loan Guarantee Scheme to strengthen the lending system and ease the flow of credit to the MSE sector. Through this system, bank credit is provided without the hassle of third party collateral or guarantees. Loans are provided to first-generation entrepreneurs to enable them to realize their dream of starting a unit of their own micro and small businesses. To implement this program, the Government of India and SIDBI have established a Loan Guarantee Fund for Micro and Small Businesses.
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This system has introduced a new hybrid product that allows guarantee coverage for loans that are not backed by collateral. The MLIs are allowed to receive collateral for part of the credit facility and the remaining part of the credit facility will be funded under the scheme up to a maximum of 200 lakh. Through this system, if the entrepreneur cannot pay the loan, the lender is paid up to a certain amount of the losses incurred by the trust.
Extension of the credit guarantee system
As you may all know, on February 1, 2022, Finance Minister Nirmala Sitharaman took office for the 2022-23 financial year. In the budget, she announced that she would extend the emergency credit line guarantee program until March 2023. This expansion will help meet the companies’ working capital needs. More than 1.3 million MSMEs will be helped by this extension. Total warranty coverage is increased by 50,000 crores for a total of 5 lakh crore. This additional amount is earmarked solely for hospitality and related businesses. This scheme will also be revised with the necessary merger of the fund. This will allow MSMEs an additional 2 lakh crore of credit and expand employment opportunities
Key Highlights Of Credit Guarantee Scheme
| Name Of The Scheme | Credit Guarantee Scheme |
| Launched By | Government Of India |
| Beneficiary | Citizens Of India |
| Objective | To Provide Credit Guarantee Facility |
| Official Website | https://www.cgtmse.in/ |
| Year | 2022 |
Objective of the credit guarantee system
The main objective of the loan guarantee scheme is to provide entrepreneurs with loan guarantee facilities so that they can expand their business by taking out loans. The Indian government will provide a loan guarantee for the entrepreneur’s loan. The benefits of this program are generally granted to first generation entrepreneurs. If the entrepreneur does not repay the loan within the stipulated period, the lender will be paid by this system from the loan guarantee up to 50%, 75%, 80% or 85% of the loss suffered by the lender. This scheme will ensure the easy flow of credit into the company. With the implementation of this program, entrepreneurs will easily receive investments that will automatically help increase the country’s GDP.
Credit guarantee within the framework of the credit guarantee system
The maximum limit for a third party collateral guarantee for a free credit facility provided by the Eligible Institution to new and existing micro and small businesses is 200 lakh. Guarantee coverage is provided to the selected NBFCS and Small Finance Bank. 50%, 75%, 80% and 85% warranty coverage is provided under the program for the sanctioned amount. The credit facility for micro business loans up to Rs 5 lakh is 85% of the guarantee. The scope of guarantee coverage is 50% up to a loan of Rs 10,000 to Rs 200,000 per retail MSE borrower.
Guarantee coverage is 80% for micro and small businesses run or owned by women and any credit or loan in the North East region for credit facilities up to Rs 50 lakh. In the event of late payment, the trust will settle the claim up to 75% of the amount. Interest on the loan is calculated according to RBI guidelines.
Category Wise Credit Guarantee
| Category | Maximum extent of Guarantee where credit facility is | ||
| Upto 5 lakh | Above 5 lakh upto 50 lakh | Above 50 lakh upto 200 lakh | |
| Micro Enterprises | 85% of the amount in default subject to a maximum of 4.25 lakh | 75% of the amount in default subject to a maximum of 37.50 lakh | 75% of the amount in default subject to a maximum of 150 lakh |
| Women entrepreneurs/ Units located in North East Region (incl. Sikkim) (other than credit facility upto 5 lakh to micro enterprises) | 80% of the amount in default subject to a maximum of 40 lakh | 80% of the amount in default subject to a maximum of 40 lakh | 75% of the amount in default subject to a maximum of 150 lakh |
| All other category of borrowers | 75% of the amount in default subject to a maximum of 37.50 lakh | The 75% of the amount in default subject to a maximum of 37.50 lakh | 75% of the amount in default subject to a maximum of 150 lakh |
| Activity | From 10 lakh upto 100 lakh | ||
| MSE Retail Trade | 50% of the amount in default subject to a maximum of 50 lakh |
Types of Loan Guarantee Programs
- Bank Loan Guarantee Scheme – In order to finance micro and small businesses, the Indian government has developed this scheme. through this
- System guarantees are provided in relation to credit facilities by the lending institution to micro and small business borrowers
- Loan Guarantee Scheme for NBFC- Through this scheme, credit facilities are granted by the eligible NBFCS to micro and small business borrowers
- Sub-Debt Scheme – Through this scheme, guarantee coverage is provided to the proposed commercial bank to provide a personal loan to the promoters of the stressed MSME through the banks to inject equity or sub-debt or quasi-equity etc
- PM svanidhi – This program was created by the Government of India to support urban street vendors. Credit guarantee coverage is provided to the lending member institution to enable it to provide credit facilities to street vendors to meet their working capital needs
Advantages and features of the credit guarantee system
- The Indian Ministry of Small and Medium Micro Enterprises has introduced a Loan Guarantee Scheme to strengthen the lending system and ease the flow of credit to the MSE sector.
- Through this system, bank loans are provided without the hassles of third-party collateral or guarantees.
- Loans are provided to first-generation entrepreneurs to enable them to realize their dream of starting a unit of their own micro and small businesses.
- To implement this program, the Government of India and SIDBI have established a Loan Guarantee Fund for Micro and Small Businesses.
- This system has introduced a new hybrid product that allows for warranty coverage that is not backed by collateral.
- The MLI may provide collateral for the portion of the credit facility
- The remaining part of the credit facility will be covered by the scheme up to a maximum of 200 lakh.
- If the entrepreneur cannot pay the loan, the scheme compensates the lender up to a certain amount of the losses incurred.
Beneficiaries of the loan guarantee scheme
- Manufacturing business
- Service-related business
- Retail trade
Inadmissibility of the credit guarantee system
- Educational/training institution
- Support groups
- Agriculture
Operational Highlights Of Credit Guarantee Scheme
| Guarantee approved during financial year 2020 | ₹45,851 crore |
| Growth and coverage in terms of amount | 52% |
| Significant growth of new products-retail and hybrid | ₹16103 crore |
| Guarantees improved during financial year 2020 for 23 new registered NBFC | ₹17,349 crore |
Scope of the guarantee coverage of the credit guarantee scheme
- Up to Rs 5 lakh micro-enterprises – 85%
- Up to 50,000 entrepreneurs/entities in Northeast region including Sikkim – 80%
- From 5,000 to 200,000 for other categories – 75%
- Up to Rs 100 lakh MSE retail – 50%
Steps to get coverage
- Applicant Registration
- GST Details
- ITR upload
- fill data
- Select bank for editing
- Provisional Guarantee Certificate
Member credit institution within the framework of the credit guarantee system
- 12 public bank
- 22 private banks
- 51RRB
- 5 foreign banks
- 9 financial institutions
- 28NBFC
- 6SFB
- 8SUCB
Eligibility criteria and required documents
- The applicant must be a permanent resident of India
- The applicant must be a first-generation entrepreneur
- Aadhar card
- ration coupon
- Income certificate
- passport photo
- GST Details
- Income Tax Refund
- bank account details
- mobile number
- email id etc
Procedure for applying under the Credit Guarantee Scheme
- First, go to the official website of the loan guarantee system
- The home page will open in front of you
- On the home page you need to click Register
- You will be redirected to a new page
- On this page again after you click Register
- After that, you need to enter your full name, email id, mobile phone number and captcha code
- Now you need to click on Get OTP
- After that, you need to enter OTP in the OTP field
- Now you need to click on Register
- After that, you need to log in by entering your credentials
- Now you need to enter your GST details
- After that, you need to upload your income tax return
- Now you need to enter the required data
- After that, you need to update your bank account details
- Now you need to click Submit
- By following this procedure, you can apply under the Loan Guarantee Scheme
Member Registration Process
- Visit the official website of the credit guarantee system
- The home page will open in front of you
- Now you need to click Member Login
- The following options will appear in front of you:-
- Credit guarantee system for banks
- Credit guarantee system for nbfc
- sub-debt system
- Clock SvaNidhi
- You must click on the option of your choice
- A new page will appear in front of you
- You must enter your access data on this page
- After that you have to click on Login
- By following this procedure you can register with 2 members
Download financial report
- Visit the official website of the credit guarantee system
- The home page will open in front of you
- Now you need to click on the Financial Information option.
- After that, you need to click Financial Report
- A new page will appear in front of you
- On this page you must click on the option of your choice
- The required details will be displayed on your computer screen
Procedure for calculating the guarantee
- Visit the official website of the credit guarantee system
- The home page will open in front of you
- On the home page you need to click Warranty Calculator
- You will be redirected to a new page
- This page requires you to enter your pin code, state, county, city, gender and activity typeAfter that, you need to click Submit
- The required details will be displayed on your computer screen
Procedure for displaying contact information
- Visit the official website of the credit guarantee system
- The home page will open in front of you
- Now you need to click Contact
- A new page will appear in front of you
- You can see contact details on this page