Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE)

• In a major boost to the Micro, Small and Medium Enterprises (MSME) sector, the Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) has approved a credit guarantee of Rs. 1 lakh crore in just 7 months of the current financial year 2023-24.

ABOUT CGTMSE

• CGTMSE has been playing a pivotal role in facilitating credit flow to MSMEs, especially those in the informal sector.
• It was launched in 2000 to make available collateral-free credit to the micro and small enterprise sector.
• Both the existing and the new enterprises are eligible to be covered under the scheme.
• The corpus of CGTMSE is contributed by the GoI and SIDBI in the ratio of 4:1 respectively.
• The Ministry of MSMEs, and Small Industries Development Bank of India (SIDBI) established a trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the CGTMSE Scheme.
• The revamped version of the CGTMSE Scheme has been provided with an additional corpus support of ₹9,000 crore in the Union Budget for FY 2023-24to provide a guarantee for an additional ₹2 lakh crore to MSEs.

ABOUT SIDBI

• A statutory body established in 1990.
• It is the Principal Financial Institution engaged in the promotion, financing & development of the Micro, Small and Medium Enterprises (MSMEs) sector and the coordination of the functions of the various institutions engaged in similar activities.
• SIDBI helps MSMEs in acquiring the funds they require to grow, market, develop and commercialize their technologies and innovative products.
• It was made responsible for administering the Small Industries Development Fund and National Equity Fund.