Business Standard

Revamp of Credit Guarantee Scheme, limit on ceiling for guarantees enhanced

With a view to revamp the Credit Guarantee Scheme for Micro and Small Enterprises, Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) issued guidelines

credit, credit card, retail credit, bank, nbfc, debit card

Illustration: Ajay Mohanty

IANS New Delhi

Listen to This Article

With a view to revamp the Credit Guarantee Scheme for Micro and Small Enterprises, Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) issued guidelines regarding reduction of annual guarantee fee for loans upto Rs 1 crore from a peak rate of 2 per cent per annum to as low as 0.37 per cent per annum.
In Union Budget 2023-24, Union Finance Minister Nirmala Sitharaman announced the revamping of Credit Guarantee Scheme for Micro & Small Enterprises with effect from April 1, 2023, with an infusion of Rs 9,000 crore to the corpus to enable additional collateral-free guaranteed credit of Rs. 2 lakh crore and the reduction in the cost of the credit by about 1 per cent.
Officials said that consequent upon this, many significant steps have been taken. The corpus of Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) has been infused with a sum of Rs 8,000 crore on March 30, 2023. CGTMSE has issued guidelines regarding reduction of annual guarantee fee for loans upto Rs 1 crore from a peak rate of 2 per cent per annum to as low as 0.37 per cent per annum. This will reduce the overall cost of credit to the Micro & Small Enterprises to a great extent.
Moreover, the limit on ceiling for guarantees has been enhanced from Rs 2 crore to Rs 5 crore. For settlement of claims in respect of guarantees for loan outstanding upto Rs 10 lakh, initiation of legal proceedings will no longer be required.
Officials said that CGTMSE created a new landmark by touching the milestone figure of approving guarantees worth Rs 1 lakh crore during FY 2022 - 23.
--IANS
kvm/shb/

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Mar 31 2023 | 4:04 PM IST

Explore News