Ref.No.CGTMSE/(44)/1458 January 14, 2016



All Member Lending Institutions (MLIs)
Attention: MSME/Priority Sector Head of MLIs

Circular No. 105/2015-16

Madam / Dear Sir,

Credit Guarantee Scheme (CGS) under CGTMSE – Lodging of ineligible activities by MLIs

CGTMSE has been extending credit guarantee facilities to Member Lending Institutions (MLIs) against their loans and advances sanctioned without collateral security and / or third party guarantee, maximum limit upto Rs.100 lakh. Micro and Small Enterprises (MSEs) engaged in both manufacturing and Service Sector as defined under MSMED Act (except for retail trade) are eligible for coverage under Credit Guarantee Scheme (CGS) of CGTMSE. Credit facilities extended for retail trade, educational / training institutions and SHGs are not eligible for coverage. It has been observed that, many MLI's are lodging large number of credit guarantee applications pertaining to credit facilities extended to retail trade, educational loans, SHG loans covered under MUDRA Scheme which are not eligible for coverage under CGS and we are required to reject all such credit guarantee applications in the system. In view of this most of the system space is getting blocked which slows down guarantee approvals

All the MLIs are requested to lodge credit guarantee applications on the portal of CGTMSE only in respect of eligible credit facilities to Micro and Small Enterprises (manufacturing and service sector).

Please bring the contents of the letter to the notice of all your offices. .

                                                                                                                                 
Yours faithfully,
Sd/-
(S.S.Bakshee)
General Manager