CGTMSE: Credit Guarantee Scheme for Micro & Small Enterprises

A credit guarantee is a financial tool that ensures a lender will be repaid if a borrower defaults on a loan. It serves as a safety net, lowering the lender's risk and encouraging them to provide credit to MSMEs (micro, small, and medium enterprises).

CGTMSE stands for Credit Guarantee Fund Trust for Micro and Small Enterprises. It is a type of secured business loan that plays a crucial role in promoting MSME lending by offering credit guarantees to banks and financial institutions. This reduces the risk for lenders, making them more willing to grant loans to MSMEs. This article explores the details of the CGTMSE scheme, explaining its operation, the beneficiaries, and its wider impact on the MSME sector in India.