20,09,762 Lending Given to Micro & Small Units Under CGTMSE

Under the Credit Guarantee Scheme for Micro and Small Enterprises, proposals of 20,09,762 units for an outlay of Rs 99,554.46 crore have been approved.

“Under Credit Guarantee Scheme of Ministry of MSME, collateral free loan is encouraged through Member Lending Institutions. Till September, 2015, 117 Member Lending Institutions have approved the proposal of 20,09,762 units with an amount of Rs.99,554.46 crore,” the MSME Ministry said on its social media site.

From April to September, 2015 which is for the first three months of current financial year, 1,97,532 proposals for a sum of Rs.10,166.83 crore have been approved by Member Lending Institutions.

All micro and small entrepreneurs are encouraged to use such facility, the Ministry reiterated.

Ministry of Micro, Small and Medium Enterprises (MSME), Government of India has launched Credit Guarantee Scheme (CGS) so as to strengthen credit delivery system and facilitate flow of credit to the MSE sector. To operationalise the scheme, Government of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

The main objective is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed.  The other objective is that the lender availing guarantee facility should endeavour to give composite credit to the borrowers so that the borrowers obtain both term loan and working capital facilities from a single agency.

The Credit Guarantee scheme (CGS) seeks to reassure the lender that, in the event of a MSE unit, which availed collateral free credit facilities, fails to discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the lender up to 75 / 80/ 85 per cent of the credit facility.