CGTMSE Scheme Eligibility
The CGTMSE eligibility criteria are as follows:
Financial Institutions: some specified rural banks, NSIC, SIDBI, NEFDi, and all scheduled commercial banks are eligible to become lending institutions. Notably, the institutes that enter into the agreement are called MLIs – Member Lending Institutions.
Eligible Business Owners: all new and existing SMEs and MSMEs are eligible to get their loan covered under the credit guarantee scheme. The following are the conditions for the same:
- For a loan facility of Rs. 50 lakhs, a borrower can get the maximum guarantee of Rs. 37.50 lakhs. Notably, the trust covers up to 75% of the defaulted loan principal amount (up to 85% in some case and for selected category of borrowers).
- The term credit includes the interest on the principal for one-quarter and/or outstanding capital advances (plus interest) as on the date when the loan account becomes a non-performing asset, or on the date the suit is filed, whichever is lower.
- Other loan charges, such as penal interest, service charge, commitment charge, etc. are not covered in the guarantee cover.
SMEs owned and ran by women entrepreneurs are also eligible to avail a guarantee cover of up to 80%.
Business loans availed in the North East Region are eligible for a guarantee cover of Rs. 50 lakhs.
Retail trade, agriculture, training institutions, educational institutions, and Self-Help Groups are not eligible to get cover under the CGTMSE claim.
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