CGTMSE loan: Govt targets Rs. 5 lakh crores credit guarantees in 2 years

Under CGTMSE, the guarantee cover available for micro enterprises is up to 85% for loans up to Rs 5 lakhs, while for loans between Rs 5 lakhs and Rs 5 crores, the cover is up to Rs 75%. Rajneesh also noted the 5-crore Udyam registration milestone achieved last week as part of the Ministry’s drive to formalize the informal businesses in the country. (Image: FE.com). The Government is aiming to enable credit guarantees worth Rs 5 lakh crores to micro and small enterprises (MSEs) in the next two years under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) program, said Dr Rajneesh, Additional Secretary and Development Commissioner (MSME), Ministry of MSME on Tuesday. “In a span of 22 years, the cumulative credit guarantees extended by CGTMSE amount was 2.6 lakh crores. But in last 2 years, we have been able to give credit guarantees worth of Rs 4 lakh crores and in the next 2 years we intend to ramp it up to another Rs 5 lakh crores,” Rajneesh said at an MSME conference organized by industry body FICCI. According to the data shared by CGTMSE in a post on X in April this year, the credit guarantee amounts approved had doubled in FY24 to Rs 2 lakh crores guarantees, the highest ever in a single FY. In comparison, the total amount in guarantees approved was Rs 1.04 lakh crores in FY23 across 11.65 lakh guarantees and Rs 56,172 crores across 7.17 lakhs guarantees in FY22.

Under CGTMSE, the guarantee cover available for micro enterprises is up to 85% for loans up to Rs 5 lakhs while for loans between Rs 5 lakhs and Rs 5 crores, the cover is up to Rs 75%. For women entrepreneurs/ SC-ST entrepreneurs/ MSEs situated in aspirational districts/ ZED-certified MSEs, etc., the guarantee cover available is up to 85% for loans up to Rs 5 crores. For MSEs based in Northeast regions, Jammu & Kashmir and Ladakh, the cover limit is up to 80% for loans up to Rs 50 lakhs and up to 75% for loans between Rs 50 lakhs and Rs 5 crores. Importantly, former MSME Minister, Narayan Rane in April last year had revamped the scheme with Rs 9,000 crores in additional corpus in the FY24 budget for enabling guarantees for additional Rs 2 lakh crores to MSEs. Rajneesh also noted the 5-crore Udyam registration milestone achieved last week as part of the ministry’s drive to formalize the informal businesses in the country. He said that it was estimated that there were around 6.5-7 crore MSMEs in Indian economy and only 1.63 crore MSMEs were registered till last year with the Government. However, “the Government started concerted drive jointly with State Governments and industry associations. As on date, the total number of registered MSMEs with the Ministry in more than 1 year has increased from 1.65 crores to 5 crores, bridging the large formalization gap.”