Credit Guarantee Scheme for Micro and Small Enterprises CGTMSE
A government-backed guarantee that lets banks lend to micro and small enterprises without collateral or a third-party guarantee, for loans up to ₹10 crore.
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- Cost to apply
- Annual guarantee fee of 0.37% to 1.20% a year, usually passed on to the borrower
- Status
- Open
- Run by
- Credit Guarantee Fund Trust for Micro and Small Enterprises, set up by the Ministry of MSME and SIDBI
What you get
- Loans up to ₹10 crore can be covered without collateral security or third-party guarantee, from 1 April 2025
- General guarantee cover is 75% of the amount in default, rising for special groups
- Women owned micro and small enterprises get enhanced cover up to 90% and a 10% concession in the annual guarantee fee
- Units led by transgender entrepreneurs get 85% cover and a 10% fee concession, from 1 March 2025
- Units in credit-deficient districts identified by RBI get a 10% fee discount and 5% extra cover
- Annual guarantee fee ranges from 0.37% to 1.20% depending on loan size, paid through the lender
Who can apply
- Open to businesses in manufacturing, services and trading.
- Micro and small enterprises.
- The most on offer is ₹10 crore.
- Udyam registration is needed. It is free.
- Loan must come from a CGTMSE member lending institution
- The guarantee is arranged by the lender, not applied for directly by the business
How to apply
- Apply for a loan at a member bank or NBFC
- Ask for the loan to be covered under CGTMSE instead of giving collateral
- The lender applies for the guarantee and the fee is charged on the guaranteed amount
In person, ask your bank to cover the loan under CGTMSE when you apply
In Kerala, ask any bank branch or lender in Kerala that is a CGTMSE member lending institution
Documents to keep ready
- Udyam Registration certificate
Figures you may see elsewhere
Women's cover is given as 85% in a July 2024 PIB release and as up to 90% in July 2026 PIB releases. The newer figure is shown.
Worth knowing
Ceiling raised from ₹5 crore to ₹10 crore from 1 April 2025, with fees for guarantees above ₹1 crore rationalised. Budget 2026-27 announced a CGTMSE-backed guarantee for invoice discounting on TReDS.
Where we found this
- PIB, Credit Guarantee Scheme for MSEs, 23 July 2026 (external site) Official announcement
- PIB, initiatives for women entrepreneurs, CGTMSE cover up to 90%, 23 July 2026 (external site) Official announcement
- PIB, reforms in PSBs, CGTMSE fee 0.37% to 1.20% (external site) Official announcement
- PIB, Year End Review 2025, Ministry of MSME (external site) Official announcement
- PMEGP portal note on CGTMSE fee for ₹10 lakh to ₹50 lakh loans (external site) Official
An independent guide by The Company of Four, not a government website. Schemes change often, so check every detail on the official website before you apply. Links marked ↗ open external websites that we do not run, and we are not responsible for their content. Seen something out of date? Tell us and we will look into it.