Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Brief
Launched in August 2000, the scheme encourages lenders to provide credit to micro and small enterprises (MSEs) without collateral or third-party guarantees by offering a guarantee against default.

Objective
To provide a financial safety net for credit-starved sectors, ensuring access to capital for new-generation entrepreneurs and micro-businesses without the hurdle of pledging assets

Eligibility Criteria
- New and existing Micro and Small Enterprises (MSEs) involved in manufacturing or service activities
- Retail traders are also eligible
- Educational institutions, training centers, and agriculture are generally excluded, though exceptions exist
- Must have a Udyam Registration Number

Benefits
- Collateral-free loans: No collateral required for loans up to ₹10 crore
- High Guarantee Coverage: Up to 85% for specific cases (micro-loans up to ₹5 lakh, women entrepreneurs, NE region) and 75% for others
- Accessibility: Encourages credit flow to first-generation entrepreneurs

Nodal Department
Ministry of Micro, Small and Medium Enterprises (MSME)