Government of India launched CGTMSE Guarantee Scheme to strengthen credit delivery system and facilitate flow of credit to the MSE (Micro & Small Enterprise) sector in India. And, to make this Scheme operational, Government of India and SIDBI has started the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
This is the logo of CGTMSE.
Its been created in a very creative and thoughtful manner. Now, if you see the logo, you will find
- Three light blue stripes connecting the word CGTMSE. This indicates the sources of ‘comfort’, ‘hope’ and ‘inspiration’ that the Trust provides to 1st generation entrepreneurs.
- And, the Flame indicates the continuous support the Trust provides to the entrepreneurs in realizing their dream of setting up units of their own.
- The Yellow colour around flame indicates source of energy. Also, it says you don’t have to worry about the collateral security or the third party guarantee. Trust says to you, the entrepreneurs to set up the your dream units in MSE Sectors
- And, the blue triangular shape resting on the word CGTMSE indicates the shed of an industrial unit and growth of MSEs in upward direction always.
Especially relevant that the logo itself defines the objective of the trust. However, to make it more clear, read below:
Objectives of CGTMSE Guarantee Scheme:
Its main and foremost aim is to support the 1st Generation entrepreneurs in realizing their dreams. Dreams of setting up a unit of their own Micro and Small Enterprise (MSE). And, the trust wants to make the bank loans available to these entrepreneurs without the hassle to collateral securities and third party guarantees. CGTMSE Scheme also gives assurance to the lenders i.e. the Banks. Also, it says, if any MSE unit, which has availed collateral free credit facilities, couldn’t repay the loan; in that case, the Guarantee Trust would make good the loss incurred by the lender up to 75 / 80/ 85 per cent of the credit facility.
Most of all is that any new as well as existing Micro and Small Enterprise, including Service Enterprises has taken any collateral or third party guarantee free credit facility (both fund as well as non fund based) from any eligible institution; then it gets a cover with a maximum credit cap of Rs.100 lakh (Rupees Hundred lakh only).
The guarantee cover available under the scheme is to the extent of 75% / 80% of the sanctioned amount of the credit facility. A maximum guarantee cap is of Rs.62.50 lakh / Rs. 65 lakh. The extent of guarantee cover is 85% for micro enterprises for credit up to Rs.5 lakh.
The extent of guarantee cover is 80% for Micro and Small Enterprises operated and/or owned by women; and for all credits/loans in the North East Region (NER). In case of default, Trust settles the claim up to 75% (or 80%) of the amount in default of the credit facility extended by the lending institution.
This is a very good initiative by government of India to boost new entrepreneurs.