Credit guarantee support designed to facilitate collateral-free MSME lending.
Credit guarantee support designed to facilitate collateral-free MSME lending.
Assess the enterprise, project location and applicable scheme conditions before submission.
Coordinate the project documents and scheme-specific application requirements.
NM Corporation can assist with scheme identification, documentation and coordination based on the applicable government programme.
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a joint initiative by the Ministry of MSME and SIDBI that provides collateral-free credit to small businesses by acting as a guarantor against potential loan defaults.
Maximum collateral-free credit limit of ₹10 crore per borrower, superseding the previous ₹5 crore cap.
Borrowers do not need to pledge property, assets, or secure third-party personal guarantees.
The scheme covers term loans, working capital, and composite credit facilities.
Additional 10% discounts on Annual Guarantee Fee are available for eligible promoter categories and specified districts.
DPIIT-recognized startups can access up to ₹20 crore under the linked Credit Guarantee Scheme for Startups (CGSS).
Guarantee coverage varies according to borrower category and loan amount.
Loan amount up to ₹5 lakh
Above ₹5 lakh – ₹50 lakh
Above ₹50 lakh – ₹10 crore
Up to ₹10 crore
Up to ₹10 crore
New and existing Micro and Small Enterprises (MSEs) operating in manufacturing, services, and trade are covered.
A valid Udyam Registration Certificate is non-negotiable.
The guarantee is not free; a fee is paid to the Trust. The AGF is calculated on the guaranteed loan amount in year one and on the outstanding balance every year after.
A flat 10% discount on the AGF is provided to Women entrepreneurs, SC/ST promoters, ZED-certified units, and units in Aspirational Districts.
Defaulting on a CGTMSE loan does not mean the borrower is free from liability. The Trust pays the bank, but legal recovery efforts against the borrower continue.
A lender cannot invoke the guarantee immediately. There is a mandatory lock-in period of 18 months from either the date of the last loan disbursement or the guarantee start date, whichever is later.
Generally, banks must initiate legal recovery procedures such as SARFAESI or DRT before claiming the guarantee. For loan defaults up to ₹5,00,000, the legal-action requirement is waived.
Once the claim is approved, CGTMSE pays the bank 75% of the guaranteed amount within 30 days.
The remaining 25% is paid only upon the conclusion of all legal recovery proceedings against the borrower.
You cannot apply directly to CGTMSE. The process is completed through a Member Lending Institution.
Create a detailed business plan with financial projections.
Submit the loan application to a Member Lending Institution including banks, NBFCs, or Regional Rural Banks.
The bank assesses project viability and, once sanctioned, applies to CGTMSE for guarantee coverage.
Upon approval by the Trust, the AGF is paid and the guarantee is activated.
Securing collateral-free funding up to ₹10 crore under CGTMSE requires meticulous financial planning and bank coordination. Whether structuring financing for an 800-square-foot industrial shed with precise three-to-four-meter heights on a 954-square-meter MIDC plot, or developing a mid-scale motel fronting an arterial road, NM Corporation bridges the gap between project conceptualization and loan disbursement.
Creating the comprehensive financial plans and detailed project reports required by Member Lending Institutions (MLIs) to assess project viability.
Accurately outlining the project costs to ensure the business meets CGTMSE thresholds while remaining optimized for state-level subsidies.
Curating the precise document checklists for bank loan applications to prevent delays and minimize back-and-forth with lenders.
Ensuring the mandatory Udyam Registration Certificate is active and properly classified under manufacturing or services to validate eligibility.
Working directly with the bank to ensure the loan is correctly processed under the CGTMSE framework rather than standard, collateral-heavy credit lines.
Highlighting specific promoter categories such as Women entrepreneurs, SC/ST promoters, or ZED-certified units to ensure the bank applies the 10% concession on the Annual Guarantee Fee (AGF).
Aligning the term loan secured via CGTMSE with state incentives like the PSI-19 program. This ensures the enterprise not only gets collateral-free capital but also capitalizes on the 5% Interest Subsidy and 100% Stamp Duty exemption on the loan documents.
Managing the exact timing of the "effective steps"—such as land acquisition, MPCB consent, and loan sanction—so that claiming the CGTMSE guarantee does not inadvertently disqualify the project from PSI-19 benefits.
Whether structuring financing for an 800-square-foot industrial shed with precise three-to-four-meter heights on a 954-square-meter MIDC plot, or developing a mid-scale motel fronting an arterial road, NM Corporation bridges the gap between project conceptualization and loan disbursement.
Ministry of MSME
The source material lists PSI-19, PMEGP, CGTMSE and food-processing related schemes among the covered programmes.