The government announced the revamping of the Credit Guarantee Scheme for Micro & Small Enterprises with effect from April 01, 2023, with an infusion of Rs 9,000 crore to the corpus to enable additional collateral-free guaranteed credit of Rs. 2 lakh crore and the reduction in the cost of the credit by about 1 percent.
CGTMSE has issued guidelines regarding the reduction of annual guarantee fees for loans up to Rs. 1 crore from a peak rate of 2% per annum to as low as 0.37% per annum. This will reduce the overall cost of credit to Micro & Small Enterprises to a great extent.
The limit on the ceiling for guarantees has been enhanced from Rs. 2 crores to Rs. 5 crores.
For settlement of claims in respect of guarantees for loans outstanding up to Rs. 10 lakhs, initiation of legal proceedings will no longer be required.
The Press Release can be accessed at:- https://www.pib.gov.in/PressReleasePage.aspx?PRID=1912500