Union MSME Minister Narayan Rane on Thursday launched the revamped Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme. The modifications included a reduction in guarantee fees for loans up to ₹1 crore by 50% to the level of 0.37% per annum only. Another major change announced was raising of ceiling for the guarantee from ₹2 crores to ₹ 5 crores and enhancing the threshold limit for claim settlement without initiation of legal action to ₹10 lakh.
The Minister while launching the revamped scheme announced that the Government will provide a guarantee for additional ₹2 lakh crore loans and advances to the micro and small enterprises. The move comes in the wake of ₹9,000 crore allocations to the scheme in the Union Budget 2023-23 to revamp the scheme.
Mr.Narayana Rane impressed upon lending institutions to make the best use of liberalisation to ensure enhanced lending to the Micro and Small Enterprises (MSE) segment without insisting on collateral. He expressed confidence that such measures would enthuse bankers to reduce their dependence on the availability of collateral security which continues to be a problem for MSEs, especially the first generation entrepreneurs.