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Following policy changes in Credit Guarantee Scheme were announced in an event “Rebooting CGTMSE” organized by Ministry of MSME and CGTMSE on February 20, 2018:-

  1. Charging Annual Guarantee Fees (AGF) on Outstanding Loan Amount rather than sanction amount.
  2. Expanding the Coverage of the Credit Guarantee Scheme (CGS) to cover MSE Retail Traders segment.
  3.  Allowing loans with Partial Collateral Security under Credit Guarantee Scheme.  
  4.  Increase in the extent of guarantee coverage to 75% from existing 50% for proposals above ₹50 lakh.
  5. Enhancing IT infrastructure of the Trust to improve operational efficiencies and reduce the turnaround time for claim settlement.  

The above mentioned steps undertaken by the Trust are expected to greatly increase the attractiveness of the scheme and increase the operational efficiency of the Trust.  This in turn is expected to increase the credit guarantees availed by MLIs and help in enhanced flow of credit to the MSE sector and betterment of the sector as a whole.

The above changes will be effective from the date of issue of circular already issued. Please refer Circulars