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CGTMSE, a collateral-free loan scheme for SMEs

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Under this scheme, loan up to 100 lakhs is available and it can be obtained for working capital requirements, purchase of machines, expansion plans, etc.

The ministry of MSMEBANGALORE, INDIA: Fundraising has always been a huge challenge for small and medium enterprises (SMEs) in India. The SMEs in the country have limited owned capital available to start a business and sustain it during initial years. They find it extremely difficult to find money when they need it most.

Though there are a number of banks, angel investors and venture capitalists being operational in the country to provide financial aid to small units in the country, their operations are not praiseworthy. They ask for collateral before deciding to fund SME business. It is quite clear that no lender will be ready to risk their money by providing loans to the small enterprises for fear of defaults. However, we cannot put the entire blame on these lenders, as defaults on loans as well as non-performing assets (NPAs) have become a common scene these days.

As a boon to the sector, the government and a few public sector banks, such as the State bank of India (SBI), have already announced collateral-free loans. The CGTMSE (Credit Guarantee Fund Trust for Small and Medium Enterprises) is one such scheme.

Launched in 2000 by the Ministry of MSMEs, the CGTMSE scheme is aimed at providing collateral-free loans to small businesses. Loans under this scheme are available to SMEs in both the start-up as well as existent phases.

The loans are given through Member Lending Institutions (MLIs). All leading banks offer loans under the scheme. The list of MLIs is available on the website of CGTMSE. Loans given by MLIs under the scheme are guaranteed by CGTMSE subject to limits.

Under the scheme, loans offered to SMEs are collateral-free. Small enterprises are not required to bring in their own collateral to avail loan. The credit given to them becomes prime security for the banks. Loan up to 100 lakhs is available under CGTMSE. Loans can be obtained for working capital requirements, purchase of machines, expansion plans, etc.

Loans given by MLIs

It is to be noted that small businesses involved in retail trade are not eligible for this scheme. The loan under the scheme is disbursed through MLIs. Guarantee fee and annual service fee need to be paid by the borrower, who avails loan under the scheme. Guarantee fee can be up to 1.5 per cent of the loan amount and annual service fee can be 0.75 per cent. This depends on the MLIs. Loans up to Rs 100 lakh can be obtained simultaneously from more than one MLI.


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AMAR A.PARDESHI Sun Jun 29 at 04:18 PM

HELLO, I AM AMAR PARDESHI FROM NASHIK, IAM WORKING LAST 15 YEARS IN ENGINEERING BUSINESS (MFG. OF PRECISION MACHINING COMPOENTS), I GOT A EXPORT ORDER FROM (USA) WE NEED WORKING CAPITAL ABOVE 1 Cr SO PLEASE LET ME KNOW

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Munir Mon Mar 10 at 04:46 PM

09870123486 Fairdeals Fincap Pvt Ltd Munir ajani Call me i will arrange CGTMSE for u all ..

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Amruth Rao.Kommu Wed Feb 19 at 10:42 PM

sir i would like to take the commercial vehicle loan through IIPP2010-2015 by covering CGTMSE so plz guide us to our bank SBH Badepally (BR) jadcherla,Mahabubnagar dist A.P

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VIVEK SAINI Wed Feb 5 at 09:41 AM

SIR PLEASE TELL ME HOW CAN OBTAIN LOAD WITHOUT COLLETRAL SECURITY BECAUSE UNDER :CGTSME" SCHEME BANK CAN NOT PROVIDED LOAN UNDER THIS SCHEME PLEASE REPLY ME

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SANJAY Thu Jan 16 at 08:41 PM

HELLO, I AM SANJAY FROM BHIWANDI, IAM ENGAGED IN TEXTILES BUSINESS (MFG. OF FABRIC ON POWER LOOMS & AUTO LOOMS)AS A MANAGER IN A PRIVATE FIRM AT SMALL STAGE, I WANT TO DO MY OWN BUSINESS BUT DUE LAC OF MONEY I CANT DO THIS ALTHOUGH I KNOW ALL POINTS OF THIS BUSINESS LIKE SUPPLIER OF RAW MATERIAL SALE POINT. FOR ALL THIS I NEED 60-70 LACKS RUPEES AS LARGE SCALE(AUTO LOOMS)OR 25-30 LACKS ON SMALL STAGE (POWER LOOMS),SO KINDLY SENT ME ALL THE DETAILS ABOUT THIS LOAN SCHEME, YOURS EARLY ACTION IN THIS REGARDS ARE HIGHLY SOLICITED, THANKYOU YOURS TRULY SANJAY

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Mr. Prasad Sat Jan 4 at 12:50 PM

Dear sir my name is Mr Prasad and i want the start new project Packaging Drinking Water I have got an Order for 3 Years, Per day 50,000 Ltrs with export company,100% profitable so I need to setup Automatic water bottling full Plant and machinery and setup in Mysore, and I am having Rented Shed about 6500 sqft with power 65 HP, +Borwel So I want the Project loan up to 50,00,000 Lakhs To Start as erliar as soon please kindly send me Details Thanks & Regards Mr Prasad

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Tejeswara Rao Tue Aug 13 at 01:40 PM

Dear sir, This is Tejeswara Rao from Pragathi nagar,Hyderabad. Sir, I would like to establish A new business named as Dr.CANE( Flavored sugar cane juice bottling ) under CGTMSE. If you allot a few minuts as a appointment for my project presentation, I can give Brief details about Dr.CANE My project cost is: 38,70,000/- Promoters contribution: 25% So, Waiting for your valuable reply. Tejeswra Rao 9248062488 9030328 328

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Abdul Rahim Khan k Wed Apr 24 at 11:39 PM

how to contact you or else please contact me my number is 7411859256

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jawahar arya Fri Mar 29 at 04:31 PM

If we take the personal guarantee of all three directors of the pvt. ltd. company. whether it will be treated as third party guarantee ? please guide.

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jawahar arya Fri Mar 29 at 04:30 PM

If we take the personal guarantee of all three directors of the pvt. ltd. company. whether it will be treated as third party guarantee ? please guide.

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jawahar arya Fri Mar 29 at 04:29 PM

If we take the personal guarantee of all three directors of the pvt. ltd. company. whether it will be treated as third party guarantee ? please guide.

add

jawahar arya Fri Mar 29 at 04:29 PM

If we take the personal guarantee of all three directors of the pvt. ltd. company. whether it will be treated as third party guarantee ? please guide.

add

jawahar arya Fri Mar 29 at 04:29 PM

If we take the personal guarantee of all three directors of the pvt. ltd. company. whether it will be treated as third party guarantee ? please guide.

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nisar babu Tue Dec 4 at 08:51 PM

words are so simple...but a person will not get a single penny in this scheme..though its sbi.sbt,pnb.corporation bank,sidbi..........................

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nisar babu Tue Dec 4 at 08:51 PM

words are so simple...but a person will not get a single penny in this scheme..though its sbi.sbt,pnb.corporation bank,sidbi..........................

add

nisar babu Tue Dec 4 at 08:50 PM

words are so simple...but a person will not get a single penny in this scheme..though its sbi.sbt,pnb.corporation bank,sidbi..........................

add

nisar babu Tue Dec 4 at 08:49 PM

words are so simple...but a person will not get a single penny in this scheme..though its sbi.sbt,pnb.corporation bank,sidbi..........................

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