Cost to Lender
Guarantee fee (GF)
Annual service fee (ASF)
The Credit Guarantee Scheme leaves it to the discretion of the MLIs to decide about passing on the incidence of guarantee fee and annual service fee to the borrower – in fact, they may decide to bear it themselves.
Regarding the interest rate payable by borrower, the MLI shall follow the guidelines issued by RBI. In any case, interest rate shall not exceed three per cent over and above the prime lending rate of the MLI, excluding the annual service fee.