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Coverage of Collateral Free Loans (CGTMSE)

  • Eligibility
  • Rate of Interest

Coverage of Collateral Free Loans (CGTMSE) : Eligibility


The purpose of the Coverage of Collateral Free Loans (CGTMSE) is to provide collateral free loans up to Rs. 500 lakhs to Micro and Small Enterprises, as defined under MSMED Act.


The eligible loan limit under the Scheme is up to Rs. 500 lakhs. A borrower, who has availed certain credit facilities secured by collaterals and/or third party guarantees and is sanctioned distinct/separate credit facility with/without collateral security/third party guarantee, can be covered under CGTMSE scheme.


Primary security is the asset created out of the credit facility extended to the borrower and/or which are directly associated with the business/project of the borrower for which the credit facility has been extended. For example, Land, Plant and Machinery or any other business property in the name of a proprietor or unit, if unencumbered, can be taken as primary security.

CGTMSE has now introduced a new “Hybrid Security” product allowing guarantee cover for the portion of credit facility not covered by collateral security.

Category (including Trading activity) Maximum extent of Guarantee Coverage
where credit facility is
Upto Rs.5 lakh Above Rs.5 lakh
upto Rs.50 lakh
Above  Rs.50  lakh & upto Rs. 500 lakh
Micro Enterprises 85% 75% 75%
MSEs located in North East Region (incl. Sikkim,UTof Jammu and Kashmir and UT of Ladakh) 80%
All other category of borrowers 75%

  • Complete details of the scheme are available on the Credit Guarantee Fund Trust for Micro and Small Enterprises website  Click Here
  • To know more, visit our nearest branch  Click Here

Coverage of Collateral Free Loans (CGTMSE) : Rate of Interest

Guarantee Fee

Composite all-in guarantee fee ranges from 1% + Risk Premium to 2% + Risk Premium depending upon the limit availed from the bank.

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