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 Coverage of Collateral Free Loans (CGTMSE)

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Coverage of Collateral Free Loans (CGTMSE)


To provide collateral free loans upto Rs. 200/- lacs (Up to Rs. 100 Lacs for Retail Trade) to Micro & 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 lacs (Up to Rs. 100 Lacs 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 (e.g.) Land, Plant & 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 lakh Above Rs.5 lakh up to Rs.50 lakh Above Rs.50 lakh up to Rs.200 lakh
Micro Enterprises 85% of the amount in default subject to a maximum of Rs.4.25 lakh 75% / Rs.37.50 lakh 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 lakh to micro enterprises 80% of the amount in default subject to a maximum of Rs.40 lakh
All other category of borrowers 75% / Rs.37.50 lakh

Guarantee Fee

Composite all-in Guarantee Fee ranges from 1.00% + Risk Premium to 2.00% + Risk Premium depending upon the limit availed from the bank.

You can see below links also

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