MSME Ministry expands Credit Guarantee Scheme for MSEs via CGTMSE
CGTMSE credit guarantees for MSEs expand through higher ceilings, lower fees, and collateral-relief measures
- CGTMSE provides credit guarantees under the Credit Guarantee Scheme (CGS) for credit facilities extended to Micro and Small Enterprises (MSEs).
- CGTMSE guarantees for MSE credit facilities are provided without collateral security or third-party guarantees.
- The RBI Master Direction dated 09.02.2026 requires scheduled commercial banks not to accept collateral security for MSE loans up to Rs. 20 lakh.
What happened
The Ministry of Micro, Small and Medium Enterprises implemented the Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The scheme provides credit guarantees for credit facilities extended to MSEs across India—covering first-generation entrepreneurs, women-led enterprises, and units located in backward districts—without collateral security or third-party guarantees.
What the expansion includes
CGTMSE credit guarantees are being strengthened through higher guarantee coverage, reduced guarantee costs, category-specific higher extent of guarantee, and collateral-relief for small MSE loans, with additional incentives for identified credit-deficient districts and a state-specific manufacturing focus in Tamil Nadu.
