Services
CGTMSE & Collateral-Free Loans
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) guarantees loans that banks give to micro and small enterprises without collateral or third-party guarantees. For first-generation promoters without property to mortgage, it often decides whether a project gets funded.
Key features (CGS-I, as updated from 1 April 2025)
- Who: new and existing micro and small enterprises registered on Udyam, in manufacturing, services, retail trade, education and training, and eligible agri-allied activities.
- Loan size: up to ₹10 crore per borrower, as term loan and/or working capital, from a member lending institution.
- Guarantee cover: 75% to 90% of the amount in default, depending on the borrower category and loan size. Women entrepreneurs receive the highest cover.
- Application: you apply to the bank; the bank obtains the guarantee online. The annual guarantee fee is payable to CGTMSE, and lenders commonly recover it from the borrower.
Source: CGTMSE scheme pages; Ministry of MSME Annual Report 2025-26
Annual guarantee fee (standard rates)
| Credit facility | Annual guarantee fee (% p.a.) |
|---|---|
| Up to ₹10 lakh | 0.37% |
| Above ₹10 lakh to ₹50 lakh | 0.55% |
| Above ₹50 lakh to ₹1 crore | 0.60% |
| Above ₹1 crore to ₹2 crore | 0.85% |
| Above ₹2 crore to ₹5 crore | 1.00% |
| Above ₹5 crore to ₹8 crore | 1.10% |
| Above ₹8 crore to ₹10 crore | 1.20% |
A 10% fee concession applies to specified categories, including women, SC/ST and Divyang entrepreneurs, aspirational districts and ZED-certified units. Lender-specific risk premia or discounts may apply.
Source: CGTMSE, fee structure
Related support
- Uttar Pradesh fee support: under the UP MSME Promotion Policy 2022, the state bears the CGTMSE guarantee fee for eligible loans up to ₹2 crore. See the policy.
- MUDRA: collateral-free loans for micro enterprises in four slabs: Shishu up to ₹50,000; Kishore ₹50,000 to ₹5 lakh; Tarun ₹5 lakh to ₹10 lakh; and Tarun Plus up to ₹20 lakh for borrowers who have repaid a Tarun loan.
- Micro Credit Card: a revolving card limit of up to ₹5 lakh for Udyam-registered micro enterprises, with a 75% guarantee and no mandatory primary security, launched in May 2026.
Source: UP MSME Promotion Policy 2022 (Invest UP); PIB on PMMY (25.03.2025); PIB on Micro Credit Card (25.05.2026)
Scheme terms change; verify on the official portal; last checked 2 Oct 2026. This page is general information for planning, not a guarantee of eligibility, sanction or disbursement. See our Terms of Use & Disclaimer.
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