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The year 2015-16 has been a momentous one in terms of CGTMSE's operations and outreach to the MSE Sector. I am glad to inform that the coverage under Credit Guarantee Scheme (CGS) has crossed yet another milestone by covering more than 5 lakh guarantee approvals in FY 2015-16, which is the highest so far in any single year. The number and amount of cumulative guarantee approvals, with 23,23,673 guarantees amounting to 1,08,991 crore till the end of FY 2015-16. It has registered a growth of about 28% and 21% respectively, over the previous Financial Year. It is also a matter of great pride for CGTMSE that the cumulative amount of credit guarantees approved by the Trust and number of loans covered, crossed 1,00,000 crore and 2 million mark respectively, in FY 2015-16.

The Trust has completed sixteen years of its existence. However, if one were to assess the impact of the CGTMSE's existence in terms of creating an enabling environment conducive for germination of ideas across the range of micro and small enterprises, these sixteen years assume a special significance. The success of CGTMSE has paved the way for the Government to identify such areas of socio-economic importance which need guarantee as a driver of growth. This has led to the creation of the National Credit Guarantee Trustee Company Ltd. (NCGTC) and evolution of various other credit guarantee programmes in the areas of Education Loans, Skill Development Loans, Factoring, Mudra Loans, Stand-up India Loans, Start-up India, etc

During the year, the Trust had the privilege of hosting the 25th Asian Credit Supplementation Institution Confederation (ACSIC) Training Programme in India (Mumbai) with the theme titled "Creating a Sustainable Credit Guarantee Organisation". The hosting of 25th ACSIC Training Programme was an intention to study and adopt the best global practices in credit guarantee organisations and was a prestigious event for CGTMSE. The CGTMSE also participated in the 28th ACSIC Conference held at Bali, Indonesia during the year and presented a case study of its experience in India on the main theme of the conference viz., "Measuring Soundness and Key Performance Indicators of Guarantee Corporations". CGTMSE's efforts, inclusive design of its guarantee products, handling of massive volume, additionality in terms of access to finance to first generation entrepreneurs and the socio-economic impact achieved by it in the 16 year period, were lauded by its international peers.

A delegation comprising officials from credit guarantee corporations of Nepal and Egypt visited CGTMSE during the year. The initiatives taken by CGTMSE in making the CGS sustainable were explained to the delegates. There were several takeaways for the delegates during these interactions.

The Trust is committed to make its credit guarantee scheme a long term sustainable product. Towards this end, the Trust has initiated a few risk mitigation measures viz., increase in the risk sharing by its Member Lending Institutions (MLIs) for bigger size loans, differential pricing mechanism duly factoring in the asset quality as recorded by MLIs with CGTMSE as also claim payout ratio and greater selectivity while registering Regional Rural Banks as MLIs of the Trust. The Trust also sharpened its inspection, post claim settlement and monitoring mechanism by carrying out increasing number of inspections of its MLIs post claim settlement.

CGTMSE, since its inception, has been constantly endeavoring to increase awareness about the CGS. During the FY 2015-16, the Trust actively participated in the Town Hall/MSME Empowered Committee Meetings organized by Reserve Bank of India with a view to disseminate information on developments in CGTMSE to the participants. CGTMSE, in association with SITI, Bhubaneswar (SIDBI Training Institute), organized focused Training Programmes for operating officials of the banks. Further, CGTMSE also participated in the workshops organized by State Bank of India, Union Bank of India and Punjab National Bank covering all Zonal Offices across the country through Video Conferencing to familiarise them with product and processes as well as resolved many guarantee specific issues. The feedback and knowledge gathered through the interaction with MLIs should immensely benefit further improvements in product and processes of the scheme. The Trust also published an updated e-booklet on its scheme, inter-alia, defining operational processes in detail and FAQs for the benefit of its MLIs.

The Trust accords very high importance to improving service to its MLIs on a continuous basis. Towards this end, the Trust introduced its own toll-free number (1800-222-659) to enable its MLIs to establish quick contact with the Trust. The initiative has been largely appreciated by the MLIs and has helped the Trust in quickly resolving MLI queries. The Trust also re-engineered certain processes by automating few of the existing manual processes with a view to significantly reduce the process time and avoidable paper work, leading to better services to MLIs.

I am grateful to the Ministry of MSME, Govt. of India, the Reserve Bank of India and the Small Industries Development Bank of India for their valuable, timely and continuous support in the CGTMSE's endeavor at creating an enabling environment for the MSE Sector. I would also like to express my appreciation for the co-operation extended by the MLIs as well as all partner institutions of CGTMSE for their dedicated efforts and support to upscale operations of CGTMSE. I also compliment the CGTMSE team for its hard work and dedication to reach newer milestones during the reporting year and hope that we all will continue to strive for greater heights in the future.

With regards,
Dr. Kshatrapati Shivaji, I.A.S.
Chairman, CGTMSE

Place : Mumbai
Date : September 22, 2016



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