Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) organisation was set up jointly by Ministry of Micro, Small and Medium Enterprises (MSMEs), Government of India (GOI) and Small Industries Development Bank of India (SIDBI) in August 2000 to facilitate an access to institutional finance to first generation entrepreneurs and underprivileged section of the society. The CGTMSE scheme has been modified from time to time for ease of operations, enhancement of credit flow to a Micro and Small Entrepreneur (MSE) sector and to meet their requirements of such enterprises as well as lending institutions.
The recent update of the scheme was made in April 2025. Generally, MSEs lack to offer collateral security and/or third-party guarantee to the lending institutions. Therefore, the Credit Guarantee Scheme of the CGTMSE is found to be a successful tool in facilitating MSEs to get the access to formal credit sources. But, it is necessary to strengthen efforts to reorient the lenders’ perspective from the age old collateral based lending to project viability, instil confidence on the part of their credit officers and branch managers and encourage to enhance the credit flow to MSEs, backed by a comfort of guarantee cover from CGTMSE. Further, while India is proposing to become a developed nation by 2030, MSEs will also have a key role to play in generating employment particularly in the backward regions. Because, CGTMSE is expected to continue to be responsive and proactive in meeting their credit needs. In this article, it is attempted to make an overview of the CGTMSE scheme and offer suggestions...(संपूर्ण लेख वाचण्यासाठी जानेवारी २०२६ मासिक पहा.)