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    Credit Guarantee Fund Scheme For Micro and Small Enterprises (Cgmse)

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    Santhosh santhu
    The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) provides credit guarantee coverage for collateral-free loans to micro and small enterprises. All loans under Rs. 10 lacs are automatically covered, while loans between Rs. 10-100 lacs require primary security of land/buildings. The scheme guarantees between 75-85% of defaulted amounts depending on loan size and borrower category. It aims to promote lending to MSEs by mitigating risks for banks.

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    Credit Guarantee Fund Scheme For Micro and Small Enterprises (Cgmse)

    Uploaded by

    Santhosh santhu
    79 views2 pages
    The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) provides credit guarantee coverage for collateral-free loans to micro and small enterprises. All loans under Rs. 10 lacs are automatically covered, while loans between Rs. 10-100 lacs require primary security of land/buildings. The scheme guarantees between 75-85% of defaulted amounts depending on loan size and borrower category. It aims to promote lending to MSEs by mitigating risks for banks.

    Original Description:

    Complete CGTMSE guid

    Original Title

    CGTMSE guid

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    The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) provides credit guarantee coverage for collateral-free loans to micro and small enterprises. All loans under Rs. 10 lacs are automatically covered, while loans between Rs. 10-100 lacs require primary security of land/buildings. The scheme guarantees between 75-85% of defaulted amounts depending on loan size and borrower category. It aims to promote lending to MSEs by mitigating risks for banks.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    79 views2 pages

    Credit Guarantee Fund Scheme For Micro and Small Enterprises (Cgmse)

    Uploaded by

    Santhosh santhu
    The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) provides credit guarantee coverage for collateral-free loans to micro and small enterprises. All loans under Rs. 10 lacs are automatically covered, while loans between Rs. 10-100 lacs require primary security of land/buildings. The scheme guarantees between 75-85% of defaulted amounts depending on loan size and borrower category. It aims to promote lending to MSEs by mitigating risks for banks.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Credit Guarantee Fund Scheme for Micro and Small Enterprises

    (CGMSE)

    Purpose
    CGMSE provides credit guarantee cover to the collateral free credit provided to Micro
    & Small Enterprises by the bank.

    Eligibility:
     For all credit facilities under MSE up to Rs.10 lacs:

    As per RBI guidelines, no collateral security shall be obtained and all eligible loans shall
    be covered under CGTMSE without exception.

     For all credit facilities above Rs.10 lacs up to Rs. 100 lacs under MSE eligible for
    coverage under CGTMSE

    Only primary security /mortgage of land and building associated with the business shall
    be obtained and all eligible accounts shall be covered under CGTMSE. However option is
    available to borrower to decide on coverage of loans under CGTMSE

    Security
    Assets created out of credit facility granted and associated with the business of the unit
    and CGTMSE covered loans no third party or collateral security.

    Rate of interest:
    Credit Facilities(Cumulative) Interest Rate
    Upto `.50000/= BR+0.50%
    Above `.50000/= upto `.10.00 lacs BR+1.00%
    Credit Rating Above `.10 lacs & upto `.100 Lacs Above `.100 lacs

    Covered Under Not Covered Under


    CGMSE CGMSE
    Synd 1 BR+1.00% BR+1.25% BR+1.25%
    Synd 2 BR+1.00% BR+1.25% BR+1.50%
    Synd 3 BR+1.25% BR+1.50% BR+2.50%
    Synd 4 BR+1.25% BR+1.50% BR+2.50%
    Synd 5 BR+1.75% BR+2.00% BR+3.00%
    Synd 6 BR+1.75% BR+2.00% BR+3.00%
    Synd 7 &below BR+2.25%. BR+2.50%. BR+3.50%.
    * All Micro Enterprises will get a rebate of 0.50% in rate of interest for prompt
    repayment; however, the final rate of interest after concession shall not be below Base
    Rate in any case.

    * The tenor premium of 0.25%shall be added for all term loans of 36 months and above
    as per the guidelines.
    Tenure

    Period of term loan in case of Term Loans and 5 years in case of working capital facility.

    Annual Guarantee Fee (AGF)

    Composite all in one guarantee fee@ 1.00% of the credit facility sanctions is payable
    annually to CGTMSE.In case of women Micro Enterprises and units in North eastern
    region it is 0.75% for loans up to Rs. 5.00 lac and 0.85% for loans above Rs 10.00

    Extent of guarantee cover (subject to maximum ceilings)

    A. For loans up to Rs.50.00 lac


    i) 85% of the amount in default for loans up to Rs.5.00 lac granted to Micro
    Enterprises.
    ii) 80% of the amount in default for loans granted to Women Enterprises/Units
    located in North Eastern Regions (other than (i) above)

    75% of the amount in default for other category of borrower.

    B. For loans above Rs.50.00 lac

    -50% of amount in default subject to overall ceiling of Rs 50.00 lakh. (50%).

    Lock-in-period

    Lock in period of 18 months from either the date of last disbursement or date of
    payment of guarantee fee whichever is later, for invoking the claim under the scheme.

    *Conditions apply

    For further details, please contact your nearest SyndicateBank branches.

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