Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
The CGTMSE Scheme is run by the Ministry of Micro, Small & Medium Enterprises , Government of India, in partnership with the Small Industries Development Bank of India . This Trust was formally constituted in August 2000, and the Credit Guarantee Fund Scheme for Micro & Small Enterprises came into effect from 1 January 2000. The purpose of the scheme is to provide credit guarantee cover to financing institutions for credit facilities extended to eligible Micro & Small Enterprises , thereby enabling MSEs to access institutional credit without the requirement of collateral security or third-party guarantee. Your business can benefit because this guarantee lowers the risk for banks/financial institutions, and thus improves your chances of getting loans.
Current Status of the scheme
As of February 28, 2026, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has issued a total of 1,39,39,040 guarantees, amounting to ₹13,16,741 crore in value.
Key Features
- Collateral-free / guarantee-backed credit facilities: Under the scheme, when an eligible MSE obtains a term loan or working capital facility from a participating lender , the CGTMSE gives guarantee cover so that the lender’s risk of default is partially covered by the Trust. This enables lenders to lend without insisting on high collateral or third-party guarantee.
- Coverage limits and guarantee percentage: The scheme has a ceiling on the credit facility eligible for guarantee cover (recently up to ₹ 10 crore as per latest guidelines) and the guarantee cover percentage varies depending on loan size, category of borrower etc.
- Eligible lending institutions and application process: Only banks/financial institutions registered with CGTMSE as MLIs can apply for guarantee cover on behalf of the borrower. The borrower approaches the lender first. The lender then applies online to CGTMSE for guarantee cover.
- Special categories & enhanced benefits: The scheme provides enhanced guarantee cover for units promoted by women entrepreneurs, SC/ST, persons with disability , ZED-certified units, units in North East region / Jammu & Kashmir / Ladakh, etc.
- Annual Guarantee Fee and other charges: For guarantee cover, an Annual Guarantee Fee is payable by the borrower/MLI depending on risk category and guarantee amount. The fee structure is periodically revised.
Financial Assistance
Eligibility Criteria
Who Can Apply:
- All new and existing Micro and Small Enterprises engaged in manufacturing or service activities.
- Loans sanctioned by eligible member lending institutions, scheduled commercial banks, RRBs, SFBs, NBFCs, SIDBI etc.
- Both term loans and working capital loans are eligible under the scheme.
Who Cannot Apply:
- Medium enterprises .
- Enterprises involved in educational institutions, agriculture, or self-help groups .
- Borrowers with existing collateralized loans under other credit lines.
Documents Required
- Udyam Registration Certificate.
- Loan application form & DPR .
- Business PAN, Aadhaar & KYC documents.
- GST registration .
- Financial statements / projected income.
- Bank account details.
Application Process for the Scheme
Option 1: Apply with Bullit
Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.
Recommended for: Entrepreneurs seeking collateral-free loans via partner banks/NBFCs.
Option 2: Apply through a Member Lending Institution
- Approach an eligible bank, RRB, SFB, or NBFC that participates in CGTMSE.
- Submit your loan proposal with project details, financials, and Udyam registration.
- Once the bank sanctions your loan, it applies to CGTMSE for guarantee cover.
- Upon approval, your loan becomes collateral-free under the scheme.
Option 3: Apply via SIDBI Direct Channel
- Entrepreneurs may apply for SIDBI’s Direct MSME Loan Schemes that integrate CGTMSE automatically.
- Loan is processed directly with embedded guarantee coverage.
Frequently asked questions
What is the CGTMSE loan interest rate?
The CGTMSE loan interest rate is set by individual banks and financial institutions, not by the credit guarantee fund trust itself. Typically, interest rates range from 10% to 14% per annum, depending on the lender and the applicant’s credit profile. Some banks may offer rates starting from 8% or 10.30% per annum for specific categories.
What is the coverage period of CGTMSE?
The CGTMSE coverage period matches the tenure of the loan. For term loans, the guarantee cover lasts for the entire repayment period. For working capital loans, the coverage is generally provided for up to 5 years from the guarantee start date.
What is the lock-in period in CGTMSE?
The lock-in period in CGTMSE is 18 months from the date of the guarantee cover commencement. During this period, the lender cannot invoke the guarantee except in cases of fraud or willful default.
How do I check my CGTMSE eligibility?
To check your CGTMSE scheme eligibility: Ensure your business is a micro or small enterprise engaged in manufacturing, services, retail, or trading. Approach a bank or NBFC from the CGTMSE bank list. Prepare required documents such as business registration, KYC, Udyam Registration, PAN, project report, etc. The lender will assess your eligibility and forward your application to the credit guarantee fund trust if you meet the criteria.
How does the government help MSMEs scale?
By offering capacity-building schemes, subsidies, infrastructure grants, and fostering an entrepreneurial ecosystem through platforms like Udyam and GeM.