CGTMSE — Credit Guarantee Fund Trust for Micro & Small Enterprises
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Quick Answer
Collateral-free credit guarantee up to ₹2 crore for micro & small enterprises
- Funding amount
- Up to ₹2 Cr
- Funding type
- Debt
- Provider
- Ministry of MSME
- Application deadline
- Rolling
- Location
- Open to startups registered in India
About this loan
Guarantee cover to lending institutions for collateral-free loans to MSEs. Coverage: 85% of loans up to ₹5 lakh (Micro); 75% otherwise; 50% for retail trade. Maximum guarantee ceiling ₹2 crore per borrower under standard track. Annual guarantee fee borne by borrower.
Eligibility
See if you're eligible
Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Grant providers
The Ministry of Micro, Small and Medium Enterprises (Ministry of MSME) is the Government of India ministry for the MSME sector. It does not run one programme. It runs a set of central schemes, each with its own portal and its own route in: a credit-linked subsidy for new…
Learn moreBenefits & Funding
- Amount
- Up to ₹2 Cr
- Fund type
- Debt
- Equity
- Equity-free
- Repayment
- Repayable
What You Get
CGTMSE enables micro and small enterprises to access collateral-free loans of up to ₹2 crore from member lending institutions, without pledging property or requiring a third-party guarantee. The Trust covers 75–85% of the loan amount (85% for micro-enterprise loans up to ₹5 lakh), significantly reducing the bank''s risk and making credit more accessible. MSEs benefit from better loan approval rates and competitive interest terms since the lender''s exposure is insured by the government-backed Trust. The scheme covers both manufacturing and service enterprises, and applies to both new and existing businesses.
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Application Process
- 1
Obtain free Udyam Registration at udyamregistration.gov.in.
Obtain free Udyam Registration at udyamregistration.gov.in.
You - 2
- 3
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How to apply
Four steps from draft to disbursement — one action each.
- 1
Draft your application
Answer the form inside the grant tracker — AI drafts each response using your past answers, so you're not starting from a blank page.
- 2
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 3
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 4
Submit on the official portal
Use the official application link and verify all details before final submission.
- 5
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Frequently Asked Questions
What is CGTMSE and how does it help MSEs?
CGTMSE (Credit Guarantee Fund Trust for Micro & Small Enterprises) provides a government-backed guarantee to lending institutions, enabling them to extend collateral-free loans to micro and small enterprises. This means MSEs do not need to pledge property or assets to get a business loan.
What is the maximum loan amount covered under CGTMSE?
Under the standard track, the maximum guarantee ceiling is ₹2 crore per borrower. For micro enterprises, 85% of loans up to ₹5 lakh are covered; 75% coverage applies for other MSEs; retail trade gets 50% coverage.
Who pays the guarantee fee?
The annual guarantee fee (AGF) is borne by the borrower and is paid to CGTMSE through the lending institution. The fee rate varies based on the loan amount and category of borrower.
Can existing MSEs apply, or only new businesses?
Both new and existing micro and small enterprises (manufacturing or service) are eligible, as long as the loan is from a CGTMSE-member lending institution.
Do I need collateral or a third-party guarantee?
No. The entire purpose of CGTMSE is to enable collateral-free and third-party-guarantee-free loans for MSEs. The Trust provides the guarantee cover to the bank instead.
How do I apply for a CGTMSE-backed loan?
You do not apply to CGTMSE directly. Apply for a business loan at any CGTMSE-member bank or NBFC (most major banks are members). The lending institution then registers the loan with CGTMSE to obtain guarantee cover.
Sources
Data on this page is compiled from official program and provider references.
News
- CGTMSE Guarantee Cover For TReDS Financing Becomes Operational For MSMEsbusinessworld.in · last week
- M1xchange becomes India’s first TReDS platform to go live with CGTMSE guarantee cover for MSME Receivables Financingsmestreet.in · 2 weeks ago
- M1xchange goes live with CGTMSE guarantee cover for MSME receivables financingm.economictimes.com · 2 weeks ago
- Sundaram Finance joins CGTMSE as member lending institution to expand MSE credit accessthehansindia.com · last month
- Sundaram Finance joins CGTMSE as member lending institution to expand MSE credit accessthehansindia.com · last month
Source: Google News aggregated
