The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, which provides credit guarantees to lenders for loans given to micro and small enterprises (MSEs) without requiring collateral, also extends support to MSEs launched and operated by Agniveers. The youth selected under the Agnipath scheme, which was approved by the Cabinet in 2022 as a recruitment scheme to serve in the armed forces, are known as Agniveers.
Under the CGTMSE scheme, enterprises are eligible for credit guarantee coverage up to 85 per cent depending on the type of enterprise and the loan amount.
For instance, MSEs located in North East Region (including Sikkim, UT of Jammu & Kashmir and UT of Ladakh) are eligible for up to 80 per cent coverage of loans up to Rs 50 lakh and 75 per cent for loans up to Rs 5 crore.
The scheme, extended to Agniveer MSEs, was revised towards the end of 2022 to also include women and SC-ST entrepreneurs-led MSEs, ZED-certified and aspiration district MSEs as well.
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The maximum extent of guarantee coverage under CGTMSE for MSEs promoted by Agniveers is up to 85 per cent for loan up to Rs 5 crore.
Along with Agniveer MSEs, the 85 per cent coverage limit is applicable for SC/ST entrepreneurs, MSEs situated in aspirational districts, ZED-certified MSEs, and Persons with Disability (PwD).
For instance, if an Agniveer MSE raises a Rs 2 crore loan from a bank and fails to repay 50 per cent of the credit, CGTMSE settles the claim up to 85 per cent of the amount in default of the loan extended by the lender.
In FY24, the scheme had approved Rs 2 lakh crore guarantees, the highest ever in a single FY in comparison to Rs 1.04 lakh crore in FY23 across 11.65 lakh guarantees and Rs 56,172 crore across 7.17 lakh guarantees in FY22. It achieved Rs 1 lakh crore guarantees this fiscal on September 19, 2024.
The government is targetting Rs 5 lakh crore credit guarantees in two years under the scheme. “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 crore and in the next 2 years, we intend to ramp it up to another Rs 5 lakh crore,” Dr Rajneesh, Additional Secretary and Development Commissioner (MSME), Ministry of MSME had said at an MSME conference organised by industry body FICCI in September this year.
