The Union Cabinet
chaired by the Prime Minister Shri Narendra Modi has given ex-post facto
approval to the package for supporting Micro and Small Enterprises (MSEs)
– Augmentation of the Corpus of Credit Guarantee Trust Fund for Micro
and Small Enterprises (CGTMSE).
The proposal entails the following:
(i) Augmentation of the corpus of the Trust from Rs. 2,500 crore to Rs.
7,500 crore, to be fully funded by the GoI;
(ii) To increase coverage of the loans covered under the credit
guarantee scheme from Rs. 1 crore to Rs. 2 crore;
(iii) To increase coverage of the credit guarantee scheme for loans
being extended to micro and small enterprises by NBFCs also. This would
enable the Trust to enhance the quantum
The measures would result in the following benefits:
Lowering the level of leverage;
Improving sustainability of the Fund;
Enable the Trust to enhance the quantum of credit guarantee to larger
number of MSEs;
Improving financial management; and
Limit the unfunded contingent liabilities.
Augmentation of the corpus would facilitate larger flow of credit to
MSEs. This in turn, would lead to increased output and employment and
thereby promote equity and inclusiveness.
As the scheme provides credit without collateral and third-party
guarantee, the start-ups would be encouraged to set up enterprises based
on innovation and new ideas.
Every operation is online and therefore, the system ensures public