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CGTMSE Scheme

A government guarantee, standing in for the collateral you do not have.

CGTMSE is the reason a capable micro or small enterprise with no property to pledge can still raise serious credit. The Trust guarantees a large share of the lender’s exposure, so the bank lends against your business rather than against an asset. The cover was recently doubled; it now extends to ₹10 crore per borrower.

₹10 cr
Maximum cover*
75–85%
Guarantee coverage
90%
For women-led*
0.37–1.20%
Annual guarantee fee
What you get

What the guarantee does, and what it does not

This is the point most borrowers misread. The guarantee protects the lender, not you. If the loan defaults, the Trust compensates the bank and you still owe the debt. What it buys you is access to credit you could not otherwise obtain.

  • Cover up to ₹10 crore per borrower, doubled from the earlier limit
  • Guarantee of 75–85% of the sanctioned amount, by borrower category
  • Up to 90% cover for women-led enterprises and Agniveers
  • Annual Guarantee Fee of roughly 0.37%–1.20% p.a., scaled to loan size
  • Hybrid security permitted, pledge partial collateral, guarantee the rest
  • Available across a large network of member lending institutions
Talk to an Advisor

Maximum Cover

₹10 cr per borrower*
  • No collateral required
  • 75–85% guarantee cover
  • 90% for women-led enterprises
Is this the right loan for you?

Built for micro and small enterprises specifically

Note the boundary carefully: CGTMSE covers micro and small enterprises under the MSMED Act. Medium enterprises are not eligible. DPIIT-recognised startups have a separate route with cover up to ₹20 crore.

A good fit if

  • You are a micro or small enterprise with Udyam registration
  • You have a viable business and orders, but no property to pledge
  • You are a proprietorship, partnership, LLP or company, all qualify
  • You are a woman entrepreneur, where cover can rise to 90%
  • Your filings and banking conduct are clean and current

Worth a rethink if

  • You have crossed into the medium-enterprise thresholds, the scheme does not apply
  • You have adequate collateral and can secure a cheaper conventional loan
  • Retail trade and certain activities remain outside the scheme’s scope
  • Your GST or ITR filings are in arrears, which stops the file regardless of the guarantee
What you’ll need

Documentation requirements

Have these ready and we can put a complete file in front of a lender the same week. Missing documents are the single most common reason a good application stalls.

Identity & address

  • PAN and Aadhaar of promoters
  • Business address proof
  • Constitution documents
  • Udyam registration certificate

Income

  • Last 2–3 years’ ITR and financials
  • Last 12 months’ bank statements
  • GST returns
  • Projected financials for the loan period

Project

  • Detailed project report
  • Quotations for machinery or fit-out
  • Order book or supply contracts
  • Existing borrowing details
Where we add value

The scheme is generous. The applications still get rejected.

Most CGTMSE declines are not scheme problems; they are file problems. An incomplete project report, an activity outside scope, or a lender whose internal appetite for guaranteed lending is already full.

Eligibility

Checked before you apply

Micro or small, activity in scope, Udyam current. We confirm all three before a file moves.

Lender choice

Not every branch lends this way

Member institutions vary enormously in how actively they use the scheme. We go where it is genuinely used.

The report

A project report that stands up

Realistic projections tied to your actual order book, not an optimistic template.

Questions borrowers actually ask

CGTMSE, answered honestly

Does the guarantee mean I do not repay if the business fails?+
No, and this is the most important thing to understand. The guarantee reimburses the lender. Your obligation to repay is unchanged, and default still affects your credit record and can be pursued.
Who pays the guarantee fee?+
Formally the lending institution pays the Annual Guarantee Fee to the Trust. In practice it is recovered from the borrower, so budget for roughly 0.37% to 1.20% a year on top of your interest rate, depending on loan size.
What is the maximum I can get?+
Cover now extends to ₹10 crore per borrower, doubled from the earlier ceiling. DPIIT-recognised startups have a separate scheme with cover up to ₹20 crore. What you are actually sanctioned still depends on your business’s ability to service it.
Do I need Udyam registration?+
Yes. It is free, takes minutes online, and is effectively a precondition. Without it, a CGTMSE application does not proceed.
Can I pledge some security and still use the scheme?+
Yes; that is the hybrid security model. You offer partial collateral and the guarantee covers the uncovered portion. It often improves both the sanctioned amount and the rate.
Why are genuine applications still rejected?+
Usually one of: the enterprise has grown into the medium category, the activity falls outside scope, filings are behind, the project report does not stand scrutiny, or the branch has limited appetite for guaranteed exposure. Every one of these is checkable in advance.

All rates, limits and timelines on this page are indicative, vary by lender and by your profile, and do not constitute a loan offer or a commitment to lend. Finnect Capital is an authorised Direct Selling Agent and referral partner, not a bank or NBFC. Every credit decision rests solely with the partner Bank/NBFC. Ask any lender for the Key Facts Statement (KFS) setting out the all-inclusive APR before you sign. See our DSA Disclosure.

Find out whether CGTMSE actually fits your business.

We will check eligibility properly before anyone fills in a form.

Talk to an Advisor