Credit Guarantee Scheme Application Form | CGTMSE scheme pdf 2021 | CGTMSE application form | क्रेडिट गारंटी योजना आवेदन फॉर्म 2021
Addressing the press conference, Union Finance Minister Sitharaman has announced eight relief measures. Out of these eight measures, four announcements are new. First of all, a new relief package related to the health sector was announced. The Finance Minister has announced a 1.1 lakh crore Credit Guarantee Scheme 2021 for the Covid affected sector. To face the economic challenges arising out of the Corona crisis, a relief package of 1.1 lakh crores has been announced for the sectors affected by Covid-19. Under this Stimulus Package, Rs 50,000 crore has been announced for the healthcare sector and Rs 60,000 crore for other sectors.
Here we will provide you the information about the Credit Guarantee Scheme. Credit Guarantee Scheme (CGTMSE) is a scheme launched by the Ministry of Micro, Small and Medium Enterprises, and Small Industries Development Bank of India. Whose full name is Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)? Through the scheme, businessmen will be given loans for business without any guarantee. If you also want to apply under the scheme. So for this, you have to download the Credit Guarantee Scheme Application Form PDF. The complete information about the application form is given to you in the article below.
Credit Guarantee Scheme Application Form PDF Download
As we told you, the Finance Minister has announced financial assistance to over 11,000 registered tourist guides/travel and tourism stakeholders through Credit Guarantee Scheme for COVID affected areas. Credit Guarantee Funds for Micro and Small Enterprises (CGTMSE) is a government loan scheme offered by the Ministry of Medium, Small and Micro Enterprises (MSME) in association with Small Industries Development Bank (SIDBI). Its focus is to provide credit guarantees to financial institutions (banks and NBFCs) that provide loans to MSMEs. CGTMSE gives loan guarantees up to a limit to the lending institutions to the MSME sector. The scheme allows banks and other lending institutions to provide funds without any security or third-party guarantee. Stay tuned to the article for more details.
|Article / Form||Credit Guarantee Scheme Application Form|
|Benefits||Loan without guarantee|
|Beneficiary||Citizen of the country|
|Purpose||To provide financial assistance through loan|
|Official Website||Click Here|
|Application Form PDF||Download|
What is Credit Guarantee Yojana/Scheme?
Credit Guarantee Scheme refers to a situation where the bank gives a loan to an applicant and takes the guarantee of this loan with the CGTMSE while the applicant does not pledge anything in return with the CGTMSE. In such a situation, a large part of the loan amount sanctioned by the lending institution is given a guarantee cover by this CGTMSE scheme. Under the CGTMSE scheme, both new and existing very small and small businesses including service enterprises can get loans up to a maximum of Rs 2 crore.
The objective of the Credit Guarantee Scheme 2021
The objective of the CGTMSE Credit Guarantee Scheme is to encourage banks to focus on smaller and smaller businesses with fairness and give more importance to business model verification. To cover the loan under the CGTMSE scheme, the borrower has to pay the guarantee fee and service charges in addition to the interest charged by the bank. The current CGTMSE guarantee fee is charged at the rate of 1.5%. It is 0.75% for North Eastern Region including Sikkim State.
As per the ‘Policy Package for Lending to Small and Medium Enterprises’, public sector banks are expected to charge an annual service charge of 0.25% from borrowers availing loans under such categories.
CGTMSE Scheme 2021 Eligibility Conditions
Following are the eligibility conditions for Credit Guarantee Yojana-
- Lending Institutions => All Listed Commercial Banks and Regional Rural Banks (RRBs), including NSIC, NEFDi, and SIDBI, all such institutions can be considered as eligible institutions. The institutions that tie up with CGTMSE are called Member Lending Institutions (MLIs).
- Eligible Beneficiaries => All new and existing MSMEs are eligible for this credit guarantee scheme under certain conditions, conditions are as follows-
- The plan guarantees up to 75% of the loan principal amount (up to 85% of the default principal amount in some cases). This cover provides a maximum guarantee limit of Rs 37.50 lakh for loan facilities up to Rs 50 lakh.
- The principal amount along with interest is covered for one-fourth of the loan tenure or for the outstanding period, such as in the case of NPA or the date of filing of dispute litigation.
- Other charges, such as penal interest, commitment charges, service charges, or any other charges do not qualify for Guarantee Cover.
The documents required for a loan under the Credit Guarantee Scheme and its coverage are given below-
- passport size photograph
- self draft business plan
- Business Incorporation Letter / Company Registration Certificate
- business project report
- CGTMSE Loan Coverage Letter
- copy of loan sanction from bank
- Any other document required by the bank
Procedure to Get Loan Under Credit Guarantee Scheme
Following is the procedure to get a loan under CGTMSE.
- Formation of Business Entity => Before initiating the loan process under CGTMSE, the loan applicant must start a Private Limited Company, Limited Liability Partnership, Person Company, or a business as per the nature of business and obtain necessary approvals. After this the tax registration to proceed with the process.
- Business plan => Applicants should create a report which gives market analysis and business plan information like business model, promoter profile, projected finance, etc. This report should be given to the lending institution. However, businesses should consider that such project reports be prepared by experienced professionals. This will increase the chances of loan approval.
- Approval for Bank Loan => Application for bank loan usually includes credit period and working capital facilities. After the application and business plan, the business model is carefully analyzed and the loan application is approved as per the different policies of the banks.
- Obtaining Guarantee Cover => After the loan is sanctioned, the bank applies to the CGTMSE authority to guarantee that loan. If the loan is approved by CGTMSE, the borrower will have to pay a guarantee fee and service charges.
The list of MLIs under the CGTMSE scheme includes 131 banks, including all major rural, urban, public sector banks and private sector banks in India.
Benefits for Business in Credit Guarantee Scheme
Small businesses are an integral part of the Indian economy and contribute about 10% to the country’s GDP. They employ more than 7 crores, people, even though they face many hurdles in availing of finance and business loans. Despite their large presence in various market segments, banks/NBFCs remain concerned about the NPAs of smaller and more small businesses. Even though it is a risk, these factors cause problems for both businesses and banks. For example, small businesses do not think of the loan approval process as simple or business-friendly. Banks prefer not to give loans until they have checked all the documents and got a guarantee. To tackle such troubles, CGTMSE (Credit Guarantee Scheme) has come forward to play an important role. It shared the risk. Has helped in providing relief to both the loan institution and the loan applicant.
Credit Guarantee Scheme Application Process
If you want to apply under the scheme, then for this you have to follow the following steps.
- First of all, you have to get its application form. Click on the link below to download the form.
- After downloading the form, you have to fill in all the information asked in the form correctly.
- After filling in the information, you have to attach the required documents along with the form.
- After adding the documents you have to submit the form to the bank. (From where you want to take a loan)
- After this, your application will be checked. You will be provided benefits under the scheme only if the information given by you in the application form is found correct.