Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE)

What is CGTMSE?
  • CGTMSE is a fund which provides guarantee for loans given to MSEs i.e. in case borrowers fails to give back loans, bank will get their money from this fund.
  • It is Central Government program to promote MSMEs.
Why in news?
  • Government has increased corpus of fund from Rs 2500 crore to Rs 7500 crore
  • Now loans given by NBFCs can also be covered under this fund
What will be the benefits of these measures?
Augmentation of the corpus of the fund will facilitate larger flow of credit to MSEs. This in turn, will lead to increase output and employment and thereby promote equity and inclusiveness. Start-ups will also be encouraged to set up enterprises based on innovation and new ideas as the scheme provides credit without collateral and third-party guarantee.

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