(THE GIST OF PIB) Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) Scheme

(NOVEMBER-2023)

The Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) Scheme has approved a credit guarantee of Rs. 1 lakh crore in just 7 months of the current financial year 2023-24.

It was launched in 2000.
Funding: The corpus of CGTMSE is being contributed by the Government of India and the Small Industries Development Bank of India (SIDBI) in the ratio of 4:1.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is jointly set up by the Ministry of Micro, Small, & Medium Enterprises (MSME), the Government of India, and the Small Industries Development Bank of India (SIDBI) to catalyse the flow of institutional credit to Micro & Small Enterprises (MSEs).
CGTMSE has been instrumental in providing guarantee cover to collateral and/or third-party guarantee-free credit facilities extended by eligible Member Lending Institution [MLIs] to MSEs.

It was established under an Act of Parliament in 1990.
It is the Principal Financial Institution engaged in the promotion, financing & development of the Micro, Small and Medium Enterprises (MSMEs) sector and the coordination of the functions of the various institutions engaged in similar activities.
The main objective of SIDBI is to offer loans (both direct and indirect) to MSMEs to help address the development and financial gaps in the ecosystem of MSMEs.
SIDBI helps MSMEs acquire the funds they require to grow, market, develop, and commercialise their technologies and innovative products.
It was made responsible for administering the Small Industries Development Fund and National Equity Fund.