UNSHACKLING THE POTENTIAL OF MSES

The economic and social significance of Micro and Small Enterprises (MSEs) to the country is a well acknowledged fact. However, unleashing the true potential of the sector is only possible by enabling commensurate credit flow.

In a country where lack of collaterals is a challenge for MSEs, CGTMSE as the facilitator of collateral free credit, unshackles the potential of MSEs and lends wings to their dreams. CGTMSE stays committed to conversion of bankable business ideas of millions of youth, enabling growth of fledglings to enterprises, catalysing financial inclusion and fostering economic growth.

GIVING WINGS TO YOUR DREAMS

MESSAGE FROM CHAIRMAN

I report, with pleasure and pride that FY 2019 has been a momentous year in the history of CGTMSE in terms of operational performance and outreach to the MSE sector.

58% Increase in Guarantees Approved.

Highest ever recorded guarantee approvals since inception

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OPERATIONAL HIGHLIGHTS – FY 2019

Guarantees Approved Amount ₹  30,168 crore - highest ever since inception

Number of Guarantees : 435,520 : 66% increase

NBFC’s - Guarantees Approved Amount ₹ 5,964 crore

New products - Retail Trade & Hybrid Model : ₹ 2,931 crore in its first year of introduction

Cumulative Guarantees Approved Amount ₹ 1,75,961 crore Number 34,60,432

Operational Income : ₹ 936 crore Claim Amount : ₹ 817 crore

Major Policy Initiatives

CGTMSE introduced the following major policy changes which made the Credit Guarantee Scheme (CGS) more attractive to MSEs and MLIs that would enable the increased credit flow to MSE Sector:

Increase in the extent of guarantee coverage

For proposals above ₹ 50 lakh, guarantee coverage has been increased to 75% from existing 50%.

Charging of fee on outstanding loan instead of sanction amount

Charging Annual Guarantee Fee (AGF) on outstanding loan amount rather than sanction amount under CGTMSE. This has been longstanding demand of the Member Lending Institutions (MLIs) and MLIs expect increased uptake in guarantee backed loans with this change. Further, this change will incentivise the disciplined MSE borrowers.

Inclusion of MSE retail trade as eligible activity

Expanding the coverage of the Credit Guarantee Scheme (CGS) to cover ‘MSE Retail Traders’ segment. This would enable considerable scope of expansion as the segment forms a large proportion of the MSE Sector.

Allowing partial collateral security

Allowing loans with partial collateral security under Credit Guarantee Scheme. This apart from bringing larger number of loans under the ambit of credit guarantee would also help in promoting disciplined credit behaviour.

Introduction of payout caps

In order to create sustainability of the Trust, cap on total claim settlement introduced, based on the fee and recovery remitted by the MLI during an year.

PERFORMANCE SNAPSHOT – FY 2019

Operations under CGS A total of 4,35,520 guarantees were approved for an amount of ₹ 30,168 crore as compared to approval of 2,63,195 guarantees for ₹ 19,066 crore in the previous year.

STATE WISE COVERAGE

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