The Ministry of Micro, Small and Medium Enterprises (MSME) and Small Industries Development Bank of India (SIDBI) established a trust named Credit Guarantee Fund Trust to provide term loans and/or working capital for Micro and Small Businesses in India.
Aim: Ensure easy availability of collateral free loans at reasonable interest rates for Micro and Small Business Enterprises in a timely manner.
Advantages of the Scheme
- Project launched by Government of India to help Micro and Small Business Enterprises.
- Both existing and new businesses are eligible under the scheme.
- Provides both term loans and/or working capital for business units up to Rs.1 crore.
- No collateral security or third party guarantee required for loan approval.
- In case of loan default, rehabilitation assistance available.
- This scheme is available through Banks and/or Financial Institutions who have entered into an agreement with the Trust.
Non-Eligibility: Any facility where the type of activity is not manufacturing, services and retail trade and given on the basis of third party guarantee is non-eligible for credit under the scheme.
Loan Amount: Term loans and/or working capital facility from 10 lakhs up to 100 lakhs per borrowing unit.