"The role of micro, small and medium enterprises (MSMEs) in the economic and social development of our country is well established. The MSME sector is a nursery of entrepreneurship, often driven by individual creativity and innovation. Thus, MSMEs are important for the national objectives of growth with equity and inclusion. The MSME sector contributes about 9 per cent of the country's GDP, 45 per cent of the manufactured output and 40 per cent of its exports. The MSMEs provide employment to over 60 million persons through more than 26 million enterprises with a lower labour to capital ratio.The overall growth in the MSME sector has been much higher than in the large industries over the last five years.

Although Indian MSMEs are a bedrock for innovation and despite being a diverse and heterogeneous group theyface some common challenges with regard to access to institutional credit, collateral requirements, equity capital, etc. It was against this background that the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was established with the objective of guaranteeing collateral and third party guarantee free credit facilities so as to enable enhanced flow of credit to the MSE sector in India.

Over the past 12 years, CGTMSE has been ably serving India's MSEs through the Credit Guarantee Scheme by providing guarantee cover to collateral and third party guarantee free credit facilities sanctioned by Member Lending Institutions (MLIs) to eligible MSEs. CGTMSE has extended guarantees for loans aggregating to over Rs.38,000crore covering approximately 8 lakh MSEs as on March 31, 2012.CGTMSE is well placed to meet the challenges of the future.

It is heartening to note that the positive impact that CGTMSE has had on credit flow to the MSE Sector has been recognised by the Government and the credit guarantee framework in the country is poised for expansion with the announcement of setting up of Credit Guarantee Funds for housing, educational loans and skill development by the Hon'ble Finance Minister during the budget speech in Parliament.

I take this opportunity to thank the Government of India, Reserve Bank of India, Small Industries Development Bank of India, all Member Lending Institutions, MSE Entrepreneurs and other national and international partner agencies for their support and co-operation. I am sure that with the active support of all stakeholders, CGTMSE would continue to excel by achieving higher performance parameters. I would also like to compliment team CGTMSE for their hardwork and dedication.

S. Muhnot