Credit Guarantee Scheme for Subordinate Debt (CGSSD)

Credit Guarantee Scheme for Subordinate Debt (CGSSD)

To provide personal loan to the promoters of stressed MSMEs for infusion as equity / quasi equity in the business eligible for restructuring, as per RBI/Bank's guidelines for restructuring of stressed MSME advances. The loans would be covered under credit guarantee by the CGTMSE upto 90% and remaining 10% is to be secured by collateral security from the promoter Borrower.

Eligible Borrowers
  • The Scheme is applicable for those MSMEs whose accounts have been standard as on 31.03.2016 and have been in regular operations, either as standard accounts, or as NPA accounts during financial year 2018-19 and financial year 2019-20.
  • Fraud/ Willful defaulter accounts will not be considered under the proposed scheme.
  • Personal loan will be provided to the promoters of the MSME units. The MSME itself may be Proprietorship, Partnership, Private Limited Company or Registered Company etc.
  • The Scheme is valid for MSME units which are stressed, viz. SMA-2 and NPA accounts as on 30.04.2020, who are eligible for restructuring as per RBI guidelines on the books of the Lending institutions.

Facility Type

Personal Loan: Term Loan

Loan Amount
  • Promoter(s) of the MSME unit will be given loan equal to 50 % of his/her stake (equity plus debt) or Rs 75 lakh whichever is lower as per last audited balance sheet.
  • This loan shall not exceed the original debt of the beneficiary MSME Unit
  • This sub debt loan is given along with restructuring of the main facility only.

Tenor and Repayment

Maximum up to 10 Years (Door To Door) with maximum moratorium of 7 Years.


Primary Security: Nil

Collateral Security:
  • Promoters to bring 10% of the Sub Debt amount as collateral security. CGTMSE guarantee cover is available for 90% of the amount of the loan.
  • 2nd charge over the assets financed under existing facilities availed by the unit. (for the entire tenor of the sub-debt facility)

Processing Fees

As per Bank’s extant Guidelines

Rate of Interest

As applicable for the credit facilities availed by the concerned MSME unit.

Guarantee Fee Payable

1.50% per annum on the guaranteed amount on outstanding basis to be paid by the Borrower.

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