CGS-I · Ministry of MSME & SIDBI
Credit Guarantee Fund Trust for Micro and Small Enterprises
Guarantee cover that lets a bank lend to a micro or small enterprise without collateral or third-party guarantee. The ceiling was raised from ₹5 crore to ₹10 crore following the FY 2025-26 budget announcement.
- Guarantee ceiling
- ₹10 Cr
- Cover
- 75%–85%
- Collateral
- Not required
Key features
What the scheme actually provides
- Guarantee cover available on credit facilities up to ₹10 crore per borrower under Credit Guarantee Scheme – I
- Cover ranges from 75% to 85% of the amount in default depending on borrower category and facility size
- Higher cover for micro enterprises, women entrepreneurs and units in the North Eastern region
- Annual guarantee fee is charged on a slab basis and is an added cost to the facility
- Applies to term loans, working capital, composite facilities and eligible retail trade
- Borrowers cannot apply directly — the facility is routed through a Member Lending Institution
Who is eligible
- New or existing micro and small enterprises in manufacturing, services or eligible trade activity
- Valid Udyam Registration
- Credit facility from a bank or NBFC registered as a Member Lending Institution with CGTMSE
- Facility not covered under any other credit guarantee scheme
- Account not classified as NPA and no default with any lending institution
Commonly not eligible
- Educational institutions, agriculture, self-help groups and training institutes
- Facilities already covered under a different guarantee scheme
- Loans where the lender has taken collateral security for the same facility, to the extent secured
Where we come in
How FIN.SWITCH handles a CGTMSE file
- 01
Assess whether your activity and entity actually qualify before you spend time on it
- 02
Prepare a DPR that carries the guarantee position, cover slab and annual guarantee fee inside the financial model
- 03
Identify Member Lending Institutions active on CGTMSE in your region and ticket band
- 04
Handle appraisal queries and follow through to sanction and guarantee lodgement
Questions
CGTMSE, answered plainly
No. It is a guarantee mechanism. The bank lends; the Trust partially indemnifies the bank against default. Your repayment obligation is unchanged.
The lender decides whether to route a facility under the scheme. A viable, well-documented proposal makes that decision easy; a thin one gives the branch a reason to ask for collateral instead.
The annual guarantee fee is levied on the lender and is usually passed on to the borrower. Model it as a real cost — it affects your effective rate and your DSCR.
Compare
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