📅 Table of Contents
- What is the CGTMSE Scheme?
- What’s New in the April 2025 Update?
- Who is Eligible Under CGTMSE?
- How Much Loan & Guarantee Coverage Can You Get?
- Annual Guarantee Fee (AGF) Breakdown
- How to Apply Step-by-Step
- Special Benefits for Northeast & Women Entrepreneurs
- Hybrid Collateral Security Explained
- Claim Settlement Process for Banks
- Common Mistakes to Avoid
- FAQs
- How Sigma Solutions Helps You
1. What is the CGTMSE Scheme?
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) enables collateral-free loans for eligible MSMEs. It provides a government guarantee to lending institutions, ensuring loan disbursal without traditional security or third-party guarantees.
Originally launched in 2000, the 2025 scheme includes updated features supporting traders, hybrid security models, and larger credit exposure.
2. What’s New in the April 2025 Update?
- Maximum loan limit increased to ₹10 crore per borrower
- Trading and educational institutions now included
- Additional 5% guarantee for ICDD (Credit Deficient Districts)
- Digital tracking & recovery system for lenders
- Revised AGF slabs and sectoral discounts
3. Who is Eligible Under CGTMSE?
✅ Eligible:
- New and existing MSMEs (as per MSMED Act)
- Enterprises in manufacturing, services, trading
- Women-led, SC/ST, PwD, and ZED-certified MSMEs
- Borrowers without full collateral or third-party guarantees
- Units located in NE, J&K, Ladakh, Aspirational Districts
❌ Not Eligible:
- Large enterprises
- Agriculture, SHGs, and fully collateralized loans
- Units under other central guarantee schemes
4. How Much Loan & Guarantee Coverage Can You Get?
| Category | Up to ₹5L | ₹5L–₹50L | ₹50L–₹10 Cr |
| Micro Enterprises | 85% | 75% | 75% |
| NE Region (incl. Sikkim), J&K, Ladakh | 85% | 80% | 80% |
| Women, Agniveers | 90% | 90% | 90% |
| SC/ST, PwD, ZED, Aspirational Districts | 85% | 85% | 85% |
| General (Others) | 75% | 75% | 75% |
| ICDD Locations | +5% extra in all slabs |
Example: A woman entrepreneur from Arunachal Pradesh applying for ₹40 lakh may receive 90% coverage under the updated scheme.
5. Annual Guarantee Fee (AGF) Breakdown
| Loan Slab | Standard AGF |
| Up to ₹10 lakh | 0.37% |
| ₹10L – ₹50L | 0.55% |
| ₹50L – ₹1 Cr | 0.60% |
| ₹1 – ₹2 Cr | 0.85% |
| ₹2 – ₹5 Cr | 1.00% |
| ₹5 – ₹8 Cr | 1.10% |
| ₹8 – ₹10 Cr | 1.20% |
Discounts (up to 30%) apply for:
- Women entrepreneurs
- SC/ST, PwD, ZED-certified units
- North East & ICDD locations
6. How to Apply Step-by-Step
- Register on Udyam Portal (mandatory if loan > ₹5L)
- Prepare DPR/Business Plan
- Approach any Member Lending Institution (MLI)
- Bank evaluates proposal, forwards to CGTMSE
- Pay AGF (usually via bank)
- Loan sanctioned & guarantee issued
✅ Most lenders use CGTMSE’s online portal to streamline the process.
7. Special Benefits for Northeast & Women Entrepreneurs
- 80–90% guarantee coverage
- 10–30% lower AGF
- Flexible loan structuring under Hybrid Security Model
- Faster approvals in hilly/tribal districts
8. Hybrid Collateral Security Explained
This structure enables loans with partial security, such as:
- ₹2 crore loan
- ₹1 crore secured by collateral
- ₹1 crore covered by CGTMSE
- AGF applies only to unsecured part
Max guarantee cap = ₹1 crore on unsecured portion
9. Claim Settlement Process for Banks
- Claim triggered when loan turns NPA
- Claim must be filed within 3 years
- First disbursal: 75% of guaranteed portion
- Balance 25% after 3 years or One-Time Settlement (OTS)
Note: No legal process needed for defaults under ₹10 lakh. Banks must report recovery status and share recoveries proportionately with CGTMSE.
10. Common Mistakes to Avoid
❌ Not registering on Udyam
❌ Adding full collateral or third-party guarantors
❌ Missing AGF payment timelines
❌ Applying for ineligible business types (e.g., agriculture)
❌ Defaulting within 90 days (no claim allowed)
11. FAQs
Q: Can existing businesses apply?
Yes. You can apply for incremental loans as long as total exposure ≤ ₹10 crore.
Q: Is trading activity covered?
Yes. Traders are now eligible under CGTMSE 2025.
Q: Can I get AGF refund on early closure?
Yes, pro-rated refund possible if claimed within 3 months.
Q: Am I still liable to repay the loan?
Yes. Guarantee helps the bank but doesn’t waive borrower responsibility.
12. How Sigma Solutions Helps You
We guide you through every stage of your CGTMSE-linked loan:
- ✅ Udyam Registration
- ✅ Project Report Preparation
- ✅ MLI Coordination & Loan Structuring
- ✅ Licensing, GST, Branding, and Setup
- ✅ Subsidy & Compliance Monitoring
📞 Call Us: +91-9084729472
📧 Email:[email protected]
🌐 Website:www.sigmasolutions.in
