Minister Narayan Rane launches the revamped CGTMSE Scheme

Minister Narayan Rane launches the revamped CGTMSE Scheme

The Union Minister for MSME, Shri Narayan Rane, launched the revamped CGTMSE Scheme in Mumbai. The scheme has been provided with an additional corpus support of ₹9,000 crore in the Union Budget for FY 2023-24 to provide a guarantee for an additional ₹2 lakh crore to Micro & Small Enterprises. The major revamp measures were launched and disseminated to the lending institutions, which included a reduction in guarantee fees for loans up to ₹1 crore by 50%, bringing the minimum guarantee fee to the level of 0.37% pa only. Another major change announced was raising the ceiling for a guarantee from ₹2 crore to ₹5 crore and enhancing the threshold limit for claim settlement without initiation of legal action to ₹10 lakh.

During the launch of the revamped measures, Shri Narayan Rane impressed upon the lending institutions to make the best use of the liberalization to ensure enhanced lending to the MSE Segment without insisting for 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.

The Secretary, Shri B B Swain, apprised that CGTMSE was also collaborating with various State Governments for enhanced guarantee coverage for MSEs in respective States. He exuded confidence that all policy level modifications, along with other initiatives being taken by CGTMSE, would result in greater utilization of the guarantee mechanism.

Shri S Ramann, Chairman and Managing Director, SIDBI (who is also the Chairman of CGTMSE), said that CGTMSE has been taking various initiatives that aim at boosting credit flow to MSEs by making the guarantee Scheme attractive for both MSEs as well as for the lenders. He also indicated that CGTMSE would come out with more schemes and assured the lenders that it would always be nimble-footed in responding to their requirements.

Banks that had best utilized the guarantee Scheme were felicitated by the Union Minister. Senior executives of banks and NBFCs appreciated the changes being brought in the Scheme and expressed confidence that these measures will go a long way in facilitating collateral-free lending to MSEs in the country and thus create employment in a big way.

During the function, it was announced that CGTMSE will collaborate with the National Institute for Micro, Small, and Medium Enterprises (ni-msme), Hyderabad, for setting up a Center of Financial Inclusion for MSME.