States with maximum guarantees approved were Andhra Pradesh with 2.37 lakh followed by Uttar Pradesh with 1.30 lakh guarantees, Maharashtra with 66,055 guarantees, among others.
Collateral-free CGTMSE loan for MSMEs: The government’s Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE), which provides guarantee cover for loans to eligible MSMEs, has recorded near 2x growth in the amount of guarantees approved in the financial year 2022-23.
According to the data shared by Bhanu Pratap Singh Verma, Minister of State in the MSME Ministry in a written reply to a question in the Lok Sabha on Thursday, the amount of guarantees approved in FY23 increased by 86 per cent to Rs 1.04 lakh crore from Rs 56,172 crore in FY22.
Moreover, the number of approved guarantees involving that amount has increased by 62.5 per cent from 7.17 lakh in FY22 to 11.65 lakh in FY23.
States with maximum guarantees approved were Andhra Pradesh with 2.37 lakh followed by Uttar Pradesh with 1.30 lakh guarantees, Maharashtra with 66,055 guarantees, among others.
Importantly, the scheme was revised in December last year to enable more credit to MSMEs. For instance, retail and wholesale trade by MSEs was brought at par with other segments or activities eligible for credit guarantee cover under the scheme. With this, the credit limit for MSEs into retail and wholesale trade with guarantee cover has been increased from Rs 1 crore to Rs 2 crore. Moreover, the extent of guarantee coverage and the rate of annual guarantee fee (AGF) was also been brought at par with other activities.
Further, the scheme had added microfinance institutions (MFIs) to the list of member lending institutions (MLIs) and women, SC-ST entrepreneurs, MSEs certified with the Zero Defect and Zero Effect (ZED) scheme and MSEs based in aspirational districts in the country were added to the list of beneficiaries.
The finance minister Nirmala Sitharaman in her budget 2023 speech had also announced an infusion of Rs 9,000 crore in the CGTMSE corpus to enable additional collateral-free credit of Rs 2 lakh crore to MSMEs and to reduce the cost of credit by 1 per cent.