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CGTMSE Scheme-Linked Financing for Micro and Small Enterprises
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) provides guarantee cover to participating lenders for eligible collateral-free credit. Understand how it works and whether it may be relevant to your business.
Use cases
Suitable business use cases
Limited collateral
Businesses that have a viable proposal but limited assets to pledge.
New enterprises
Eligible new micro and small enterprises seeking their first formal credit.
Term or working capital
Eligible term loans and working capital facilities may be covered.
Manufacturing & services
Eligible units in manufacturing, services and specified trade activities.
Key eligibility factors
Lenders weigh these and other factors according to their own credit policies.
- Being a micro or small enterprise under the applicable MSME definition
- Udyam Registration, as typically required
- The lender being a Member Lending Institution (MLI) of CGTMSE
- The lender's own credit appraisal of your proposal — guarantee cover does not replace it
- The facility and activity being eligible under the scheme rules in force
- Applicable guarantee fees, which lenders may recover from the borrower
Commonly requested documents
Indicative only — the exact list depends on the lender, your constitution and the proposal.
Business & promoter KYC
- PAN of the business entity and of promoters / partners / directors
- Address and identity proof of promoters, as required by the lender
- Udyam Registration certificate (where registered)
- GST registration certificate (where applicable)
- Constitution documents — partnership deed, LLP agreement or MoA/AoA
Financial records
- Income tax returns, typically for the last 2–3 years
- Audited or provisional financial statements (balance sheet, P&L)
- Business bank statements, often for the last 6–12 months
- GST returns for recent periods (where applicable)
Proposal details
- Project report or business plan for new enterprises
- Quotations for assets to be purchased, if any
- Udyam Registration certificate
The process
How the financing process works
- 1
Share your requirement
Tell us about your enterprise and the funding you need.
- 2
Understand relevance
We explain how CGTMSE cover works and whether it may apply to your case.
- 3
Prepare the application
We help you prepare a complete loan proposal for the lender.
- 4
Lender appraisal
The lender appraises the loan and decides whether to seek guarantee cover.
- 5
Lender decision
Sanction, cover and terms are determined by the lender under the scheme rules.
Eligibility, approval, pricing, collateral requirements and disbursal depend on the lender and its applicable policies. LoanDhara does not lend and does not guarantee approval.
CGTMSE Scheme-Linked Financing: frequently asked questions
No. CGTMSE is not a lender and does not accept loan applications from businesses. You apply for a loan with a bank or financial institution that is a Member Lending Institution, and the lender decides whether to seek guarantee cover.
Under the scheme, eligible facilities are extended without collateral security or third-party guarantees. Lenders typically still take a charge on assets created from the loan (primary security) and fully assess your proposal.
No. Coverage depends on the scheme's eligibility rules at the time, the type of facility and the lender's decision. Limits and fees are revised from time to time, so check the current CGTMSE guidelines or ask your lender.
More questions? See all FAQs or talk to an expert.
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