Collateral-Free Loans
Enables banks and NBFCs to sanction MSME loans without asking for collateral or third‑party guarantee, backed by CGTMSE cover.
Collateral-Free Loan Guarantee
CGTMSE
Credit Guarantee Fund Trust for Micro and Small Enterprises
Credit guarantee scheme that allows banks and NBFCs to give collateral-free loans to micro
and small enterprises, with government-backed guarantee cover on the sanctioned credit.
Who Can Apply?
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Enterprise Type
New or existing micro and small enterprises engaged in manufacturing or services, as per MSME definition.
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Collateral-Free Facility
Credit facilities extended without third‑party guarantee or collateral security (hybrid models allowed for part‑secured loans).
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Loan Amount Limit
Fund and non‑fund based facilities up to ₹10 crore per eligible borrower can be covered under the scheme.
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Lending Institution
Loan must be sanctioned by a CGTMSE‑registered bank, SFB, or NBFC classified as Member Lending Institution (MLI).
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Standard Account
Credit facility should be standard and regular at the time of guarantee application, as per RBI norms.
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Constitution
Proprietorship, partnership, LLP, company, and other eligible MSME constitutions as permitted by CGTMSE guidelines.
Key Features
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High Credit Limit
Covers fund and non‑fund based credit facilities up to ₹10 crore per eligible borrower under the guarantee scheme.
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Higher Cover for Women
Women and some special category borrowers can get enhanced guarantee cover compared to standard borrowers.
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Wide Sector Coverage
Applicable to a broad range of manufacturing and service activities, including traders as per updated guidelines.
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Risk Protection for Lenders
Guarantee cover of around 75–85% of the sanctioned amount reduces default risk for lending institutions.
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Fast Guarantee Activation
Guarantee is typically approved quickly after the MLI applies and pays the guarantee fee, making processing smoother.
Scheme Benefits
Access to formal credit without pledging property or other collateral.
Guarantee cover up to around 85% for micro and priority category borrowers.
Suitable for new units as well as expansion of existing MSEs.
Hybrid security option available where only part of the facility is secured.
Higher chances of loan approval due to reduced risk for banks and NBFCs.
Support available for both term loans and working capital limits.
Encourages first‑generation entrepreneurs to start and grow MSMEs.
Applicable across India through multiple participating lenders.
Application Process
01
Choose MLI & Discuss Requirement
Approach a CGTMSE‑registered bank or NBFC and discuss your MSME funding need, project, and repayment capacity.
02
Prepare Project Report & Documents
Prepare business plan, financial projections, KYC, registrations, and other documents as required by the lender.
03
Loan Appraisal & Sanction
Lender appraises your proposal, sanctions the loan as per its credit policy, and decides to cover it under CGTMSE.
04
Guarantee Cover & Disbursement
Lender applies on CGTMSE portal, pays guarantee fee, and activates cover; loan is disbursed as per terms.
FAQs
Frequently Asked
Questions
Questions
Credit facilities up to around ₹10 crore per eligible borrower can be covered
under the CGTMSE guarantee, subject to scheme and lender guidelines.
The core objective is to provide collateral‑free credit. In pure CGTMSE
coverage, no third‑party guarantee or collateral is taken, though hybrid models
may allow partial security.
New and existing micro and small enterprises in manufacturing and services that
obtain loans from CGTMSE‑registered lenders and meet the scheme’s eligibility
norms.
No. The guarantee cover is typically in the range of 75–85% of the sanctioned
amount, depending on borrower category and loan slab.
You do not apply directly to CGTMSE. You apply to a bank or NBFC; if your
proposal is viable, the lender sanctions the loan and separately obtains
guarantee cover from CGTMSE.
Contact
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Intelligent Things
E-mail address
Info@naavbharat.com
Phone number
+91 90812 22372