MSME Minister Narayan Rane Launches Rs 20 lakh Scheme Under CGTMSE For GST-Exempted Micro Units
MSME Minister Narayan Rane launched a special scheme for informal micro enterprises (IMEs), exempted from the Goods and Services Tax (GST) regime. This scheme enables IMEs to access collateral-free loans up to Rs 20 lakh under the government’s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Objective of the Scheme
The scheme, titled ‘Special Provision for Informal Micro Enterprises under Credit Guarantee Scheme,’ aims to provide credit support to micro or nano enterprises. It seeks to moderate the credit risk perception associated with lending to IMEs, as stated by the MSME Ministry.
Guarantee Cover and Lending Provisions
According to a circular issued by CGTMSE to all its member lending institutions (MLIs) on February 14, the scheme offers up to 85% guarantee cover for unsecured loans up to Rs 20 lakh to IMEs registered on the Udyam portal. This move is expected to encourage MLIs to extend more loans, thereby increasing credit flow to IMEs in the MSE sector.
CGTMSE Milestones
Established in 2000, CGTMSE has recently achieved significant milestones. It surpassed Rs 1.50 lakh crore worth of guaranteed amount in the current financial year, marking a sharp increase of 50% compared to the previous fiscal year’s figure of Rs 1.04 lakh crore, according to the MSME Ministry.
