The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme enables collateral-free credit for micro and small businesses — covering machinery purchase, equipment upgrade, technology investment, and working capital expansion.
CGTMSE — Credit Guarantee Fund Trust for Micro and Small Enterprises — is a government-backed scheme that enables banks and NBFCs to offer collateral-free loans to eligible micro and small businesses. The trust provides a guarantee cover to lenders, reducing their risk and making credit more accessible to smaller enterprises.
Under this scheme, eligible borrowers can access term loans and working capital facilities without pledging property or assets as primary collateral. The guarantee cover typically ranges from 75% to 85% of the credit facility, depending on the enterprise category and loan amount.
CGTMS loans are especially suited for capital expenditure — purchasing machinery, upgrading equipment, and investing in technology — as well as working capital needs for established micro and small enterprises.
The Credit Guarantee Fund Trust for Micro and Small Enterprises was set up by the Government of India and SIDBI in 2000. It provides first-loss guarantee cover to Member Lending Institutions (MLIs) that extend credit to micro and small enterprises without collateral or third-party guarantees.
Government-backed credit guarantee makes institutional lending more accessible for micro and small enterprises that lack collateral.
CGTMSE cover of up to 85% reduces the lender's risk and helps businesses that lack traditional collateral to still access formal credit.
Eliminates the need for personal guarantors or property pledges, making the loan genuinely unsecured for the borrower within the scheme framework.
Tenures up to 96 months allow businesses to align EMI obligations with actual asset utilization and cash flow from the financed equipment.
Fund requirements for capital expenditure as well as day-to-day operations are both eligible under CGTMSE — a key advantage for growing MSEs.
Guarantee cover reduces lender risk, which can translate into more competitive pricing compared with unsecured business loans without scheme coverage.
Successful repayment of CGTMS loans helps MSEs build formal credit track records, improving future access to larger institutional credit.
Rate bands vary based on enterprise category, CIBIL score, loan tenure, and lender-specific policies.
| Enterprise Category | Rate Range (p.a.) | Max Cover |
|---|---|---|
| Micro Enterprise (up to ₹10L) | 9.5% – 11% | 85% guarantee |
| Small Enterprise (₹10L–₹50L) | 10% – 13% | 75% guarantee |
| Small Enterprise (₹50L–₹2Cr) | 11% – 14% | 75% guarantee |
| Women / NE Region / SC-ST | 9.5% – 11% | 85% guarantee |
Compare with alternatives to choose the right product for your business stage.
| Feature | CGTMS | Business Loan | LAP |
|---|---|---|---|
| Collateral | ✓ None | ✓ None | ✗ Property |
| Govt Guarantee | ✓ Yes | ✗ No | ✗ No |
| Rate | 9.5%+ | 12%+ | 8.5%+ |
| Max Amount | ₹2Cr | ₹2Cr | ₹5Cr |
| Max Tenure | ✓ 96 Mo | 60 Mo | 120 Mo |
| Who qualifies | MSEs only | All businesses | Property owners |
These are general indicators based on CGTMSE scheme guidelines. Final eligibility is confirmed after lender and scheme review.
How credit score affects scheme approval and rate
Tell us your business type, Udyam registration, loan purpose, and required amount
We review MSE classification, CIBIL, turnover, and CGTMSE scheme fit
KYC, business registration, financials, and equipment quotation are collected
Lender sanctions under CGTMSE cover; funds released directly to your account
Requirements vary by lender and enterprise type. These are indicative — confirm with our team before applying.
Use this calculator to plan a likely monthly EMI, total interest outgo, and total repayment based on the loan amount, rate, and tenure you enter.
Rates and terms are indicative and subject to change. Contact us for current offers based on your enterprise profile and loan requirement.
| Lender | Interest Rate | Max Amount | Max Tenure | Processing Fee | Best For |
|---|---|---|---|---|---|
| South India Loans | From 9.5% | ₹2Cr | 96 months | 0.5%–1% | Best Overall |
| SBI (CGTMSE) | 9.85%–12% | ₹2Cr | 84 months | 0.5% | Govt/PSU Banks |
| Bank of Baroda | 10%–13% | ₹2Cr | 84 months | 1% | Manufacturing MSEs |
| SIDBI Direct | 9.5%–11% | ₹1Cr | 60 months | 0.5% | Micro Enterprise |
| Canara Bank | 10.25%–13% | ₹2Cr | 84 months | 1% | Service Sector |
| HDFC Bank (CGTMSE) | 10.5%–14% | ₹1.5Cr | 60 months | Up to 2% | Fast Processing |
ℹ️ Rates are indicative and sourced from publicly available information. Actual CGTMSE offers depend on enterprise classification, credit profile, and lender-specific policies. South India Loans works with multiple MLIs to match you with the best available scheme offer.
Talk to our team for guidance on CGTMSE eligibility, required documents, and which Member Lending Institution is best suited for your enterprise.