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CREDIT GUARANTEE FUND SCHEME FOR MICRO AND SMALL ENTERPRISES

 

The Credit Guarantee Fund Trust for Small Industries, have a Scheme for the purpose of providing guarantees to a substantial extent in respect of credit facilities to borrowers in Micro and Small Enterprises, hereby make this Scheme

Start Date: August 1, 2000.

  • The Trust undertakes, credit facilities for an eligible borrower from time to time by an eligible institution which has entered into the necessary agreement for this purpose with the Trust, to provide a guarantee on account of the said credit facilities.
  • The Trust shall cover credit facilities to a single eligible borrower in the MSME sector for credit facility
    • not exceeding Rs. 50 lakhs (Regional Rural Banks/Financial Institutions)
    • not exceeding Rs.1 Crore (Scheduled Commercial Banks and select Financial Institutions)

Criteria:

  • The dues to the lending institution have not become bad or doubtful of recovery
  • The business or activity of the borrower for which the credit facility was granted has not ceased
  • The credit facility has not wholly or partly been utilised for adjustment of any debts deemed bad or doubtful of recovery, without obtaining a prior consent in this regard from the Trust.

 Fee and Annual Service Fee

  • One-time guarantee fee at specified rate:
    • 00% in the case of credit facility up to Rs. 5 Lakh
    • 5% in the case of credit facility above Rs. 5 Lakh
    • 75%, in case of credit facilities up to Rs.50 lakh
  • The annual service fee at specified rate of
    • 50% in the case of credit facility up to Rs. 5 Lakh
    • 75% in the case of credit facility above Rs. 5 Lakh

Trust’s liability to be terminated in certain cases:

  • If the credit facilities are transferred to some other borrower, then the liability of the trust shall be terminated
  • If a borrower becomes ineligible for being granted any credit facilities under the Scheme, by reason of his activity or his undertaking ceasing to come within the definition of a MSE unit, the liability of the Trust in respect of any credit facilities granted to him will be terminated
  • On non-payment of annual service fee within the stipulated time or such extended time that may be agreed to by the Trust on such terms, liability of the Trust to guarantee such credit facility would lapse in respect of those credit facility against which the service charges are due and not paid,

Guarantee by Trust:

The Trust shall provide guarantee as under:

 

Category

Up to Rs.5 lakhs Above Rs.5 lakhs up to Rs.50 lakhs

Above Rs.50 lakhs up to Rs.100 lakhs

Micro Enterprises

85% of the amount in default subject to a maximum of Rs.4.25 lakh 75% /Rs.37.50 lakh

Rs.37.50 lakh plus 50% of amount in default above Rs.50 lakh subject to overall ceiling of Rs.62.50 lakh

Women entrepreneurs/Units located in North East Region other than credit facility up to Rs.5 lakhs to micro enterprises

80% of the amount in default subject to a maximum of Rs.40 lakhs

Rs.40 lakhs plus 50% of amount in default above Rs.50 lakh subject to overall ceiling of Rs.65 lakhs

All other category of borrowers

75% /Rs.37.50 lakh

Rs.37.50 lakh plus 50% of amount in default above Rs.50 lakh subject to overall ceiling of Rs.62.50 lakh

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3 comments

  1. Dear sir,
    how can i applay thae( DEDS SCHEME) PLZ give me the further information

  2. if ypu can help me out i will provide out the best of it.

  3. I want to cgtsme loan

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