Ob­jec­tives of CGTMSE

Consumer Voice - - Taxi Loans -

Avail­abil­ity of bank credit with­out the has­sles of col­lat­er­als/third-party guar­an­tees is a ma­jor source of sup­port to first-gen­er­a­tion en­trepreneurs set­ting up their own mi­cro and small en­ter­prise (MSE). Keep­ing this fac­tor in view and to strengthen the credit de­liv­ery sys­tem and fa­cil­i­tate flow of credit to the MSE sec­tor, the min­istry of mi­cro, small & medium en­ter­prises (MSME) launched the Credit Guar­an­tee Scheme (CGS). To op­er­a­tionalise the scheme, the govern­ment and Small In­dus­tries De­vel­op­ment Bank of In­dia (SIDBI) set up the Credit Guar­an­tee Fund Trust for Mi­cro and Small En­ter­prises (CGTMSE).

Who are these ‘mi­cro’ and ‘small’ en­ter­prises? As per the Mi­cro, Small and Medium En­ter­prises De­vel­op­ment (MSMED) Act, 2006, mi­cro en­ter­prises in­clude – Man­u­fac­tur­ing en­ter­prises en­gaged in the man­u­fac­ture or pro­duc­tion, pro­cess­ing or preser­va­tion of goods where in­vest­ment in plant and ma­chin­ery does not ex­ceed Rs 25 lakh Ser­vice en­ter­prises that are en­gaged in pro­vid­ing or ren­der­ing of ser­vices where the in­vest­ment in equip­ment does not ex­ceed Rs 10 lakh Small en­ter­prises in­clude – Man­u­fac­tur­ing en­ter­prises en­gaged in the man­u­fac­ture or pro­duc­tion, pro­cess­ing or preser­va­tion of goods where the in­vest­ment in plant and ma­chin­ery is more than Rs 25 lakh but does not ex­ceed Rs 5 crore Ser­vice en­ter­prises that are en­gaged in pro­vid­ing or ren­der­ing of ser­vices where the in­vest­ment in equip­ment is more than Rs 10 lakh but does not ex­ceed Rs 2 crore

The main ob­jec­tive is that the lender should give im­por­tance to project vi­a­bil­ity and se­cure the credit fa­cil­ity purely on the pri­mary se­cu­rity of the as­sets fi­nanced. The other ob­jec­tive is that the lender avail­ing guar­an­tee fa­cil­ity should en­deav­our to give com­pos­ite credit to the bor­row­ers so that the bor­row­ers ob­tain both term loan and work­ing cap­i­tal fa­cil­i­ties from a sin­gle agency.

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