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Coverage of Collateral Free Loans (CGTMSE)

  • Eligibility
  • Rate of Interest

The purpose of the Coverage of Collateral Free Loans (CGTMSE)is to provide collateral free loans up to Rs. 200 lakhs (Up to Rs. 100 lakhs for Retail Trade) to Micro and Small Enterprises, as defined under MSMED Act, 2006.

The coverage of the Scheme is extended to all new and existing Micro and Small Enterprises (both in the Manufacturing Sector as well as in the Service Sector) as defined under MSMED Act, 2006.


The eligible loan limit under the Scheme is up to Rs.200 lakhs (up to Rs. 100 lakhs for Retail Trade). 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 Maximum extent of Guarantee where credit facility is
Up to Rs. 5 lakhs Above Rs. 5 lakhs up to Rs. 50 lakhs Above Rs.50 lakhs up to Rs.200 lakhs
Micro Enterprises 85% of the amount in default subject to a maximum of Rs. 4.25 lakhs 75% / Rs. 37.50 lakhs 75% of total amount in default w.e.f. 01/04/2018 for guarantees issued on or after 01/04/2018. (Not applicable for enhancements done in accounts sanctioned prior to 01/04/2018)
Women entrepreneurs/Units located in North East Region (incl. Sikkim) other than credit facility up to Rs. 5 lakhs to micro enterprises 80% of the amount in default subject to a maximum of Rs.40 lakhs
All other category of borrowers 75% / Rs. 37.5 lakhs

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

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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