CGTMSE stands for Credit Guarantee Fund Scheme for Micro and Small Enterprise. As per the information available, this scheme was launched by the government of India and the main object behind launching this scheme was to offer a credit to the small and micro-enterprise in order to support them for doing business. It should be noted that under the scheme, the government promised to offer the loan without any collateral.
Most of the schemes launched by the government are usually applicable for the new enterprise but in case of CGTMSE, the scheme was applicable for the new as a well old enterprise. This might have already started to capture your interest so to help you, in this article, we have listed the details of the documents required to get benefits under CGTMSE Scheme along with the Application procedure and other such details.
Before you check out the details, it should be noted that CGTMSE evaluates the project details and they also check the feasibility and viability of the projects.
So, let us now look at the details.
What is covered under CGTMSE?
Under the scheme, the funds may cover 805 of the micro and small enterprise which is actually operated and owned by the female entrepreneurs. In addition to this, the funds can also cover the credit and loan that may be required by the states in the north eastern part of the country.
In terms of eligible firms, the scheme covers the existing and new micro, medium and small enterprises which are involved in the manufacturing activities. An exception has been granted to the firms which are involved in services as well but services like retail trade, self-help group, training institute, educational institute and NBFC are not covered under the scheme.
For complete eligibility guidelines, refer to https://cgtmse.in/Eligibility_criteria.aspx
Fee Charged by CGTMSE Scheme to Cover Projects
As per what is notified, it is known that the trust fund charges 1% per annum for the total amount sanctioned as a fee. In addition to this, for the credit of upto Rs 5 Lakh, the fee is 0.75% and for the credit that is between Rs 5 Lakh and Rs 10 Lakh, the fee is 0.85%.
Apart from what is mentioned above, it is known that the scheme also assures a credit guarantee of75% to 80% including the maximum cap of Rs 65 Lakh. In the case of a micro enterprise, it is known that the percentage guarantee is capped at 85% for a sanctioned amount of Rs 50 Lakhs. Additionally, the percentage guarantee is 50% for a sum that is between Rs 50 lakh and Rs 1 Crore. Lastly, the credit block guarantee tenure is capped to 5 years or a block of 5 years.
For more details regarding the fee, you can refer to https://www.cgtmse.in/Fees.aspx
Banks Involved in the Scheme
Under the scheme, the public sector banks, 21 private sector banks, 73 regional rural banks, 4 foreign banks are known to be the eligible lender. In addition to this, there are corporations like Delhi Financial Corporation, Kerala Financial Corporation, Tamil Nadu Industrial Investment Corporation, Jammu and Kashmir Development Finance Corporation, NSIC and NEDFI listed under the eligible lenders. Lastly, Export Import Bank of India and Small Industries Development Bank of India are also listed under the program.
Application Procedure for CGTMSE
Here is how you can apply for the CGTMSE Scheme
- Even before you start the application procedure, you need to come up with a business plan and this should be a detailed business plan including the financials and the business model of the organization.
- Once the business plan is ready, you can choose the lender bank for the scheme and obtain the application from the bank. Now, go ahead and submit the application to the bank along with the required documents.
- Once the application is submitted, the details will be verified and the bank will also review the project model along with other details
- If the bank approves the project, the approved projects will be forwarded to CGRMSE for further verification and review. Then the contract will be prepared and the funds will be released to the business.
- After the funds have been disbursed, you can go ahead and make the payment of the fee.
This was the complete registration process for CGTMSE. You can also contact the CGTMSE if required and the toll-free number for the office is 1800 222 659. The tolled number is 022 6722 1553. Also, you must only contact the office during business hours. As per the website, the business hours for CGTMSE office are 10:30 AM to 6:30 PM from Monday to Friday.
The toll-free number can be used to make a complaint or to get information about the procedure or the application status as well.