Banks usually avoid providing loans to street vendors, shopkeepers, truck drivers and taxi operators, etc.
The Credit Guarantee Fund Scheme offers guarantees to banks, RRBs, Small Finance Institutes and NBFCs so that they can provide loans to owners of MSMEs without collateral.
The Ministry of MSME and SIDBI created a trust fund that finances the Credit Guarantee Fund Scheme called Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
CGTMSE Loans are provided through its Member Lending Institutions.
A list of all MLIs as of November 2020 are attached in this link.
Note: Subject to change as per policy review
Category | Maximum extent of Guarantee where credit facility is | ||
Micro Enterprises | Up to ₹ 5 lakh | Above ₹ 5 lakh & up to ₹ 50 lakh | Above ₹ 50 lakh & up to ₹ 200 lakh |
85% of the amount in default subject to a maximum of ₹ 4.25 lakh | 75% of the amount in default subject to a maximum of ₹ 37.50 lakh | 75% of the amount in default subject to a maximum of ₹150 lakh | |
Women entrepreneurs/Units located in North East Region (incl. Sikkim) (other than credit facility up to ₹ 5 lakh to micro enterprises) | 80% of the amount in default subject to a maximum of ₹ 40 lakh | ||
MSME Retail Trade (from ₹10 lakh up to ₹100 lakh) | 50% of the amount in default subject to a maximum of ₹ 50 lakh | ||
All other eligible category of borrowers | 705% of the amount in default subject to a maximum of ₹ 150 lakh |
The MSME 59 minute loan scheme seeks to provide hassle-free loans with minimum paperwork within an hour!
The Credit Guarantee Fund Scheme can offer loans to street vendors, shopkeepers, truck drivers and taxi operators, etc.,
The Credit Guarantee Fund Scheme offers guarantees to banks, RRBs, Small Finance Institutes and NBFCs so that they can provide loans to owners of MSMEs without collateral