Presently, guarantee fee is payable @1.5% (0.75% in case of North Eastern Region including state of Sikkim) on the credit facility agreed to be covered by the Trust. In this case, maximum of Rs. 100 lakh would be extended guarantee cover even though the sanctioned amount exceeds Rs. 100 lakh. Similarly, the Annual service fee would be payable @0.75% on the guaranteed amount subject to a ceiling of Rs. 100 lakh.

Yes, a lender can extend either term loan or working capital facility alone and still be eligible for a guarantee cover if it meets the other eligibility parameters. Needless to say, the credit facility extended to a borrower should be without any collateral security and/or third party guarantee.

CGTMSE provides  a guarantee cover up to 75% of the amount in default subject to a maximum of Rs.62.50 lakh. However the extent of guarantee cover is 85%,under following case: (a) Credit facilities up to Rs. 5 lakh extended to Micro Enterprises. Also the extent of guarantee cover is 80%, subject to a maximum of Rs.65 lakh under following cases. (a) For micro and small enterprises operated and/ or owned by women irrespective of amount (b) Credit facilities to units in the North Eastern Region (including State of Sikkim). 

In the first year of coverage of each guaranteed unit, the Annual Service Fee is worked out on pro-rata basis i.e. at the applicable rate of fee charged for the period (no. of days) of outstanding, starting from the date of commencement of the guarantee cover till March 31. For calculation of Annual Service Fee, number of days in a year is taken as 365. For subsequent years, service fee is charged for the whole year, on the credit facility guaranteed except for terminal year or closed cases where it is on pro rata basis.

Primary security is the asset created out of the credit facility extended to the borrower and / or which are directly associated with the business / project of the borrower for which the credit facility has been extended. Collateral security is any other security offered for the said credit facility. For example, hypothecation of jewellery, mortgage of house, etc.

CGTMSE gives guarantee to its MLIs. Therefore, entrepreneurs in the Micro and small enterprises sector have to approach the Banks or financial institutions (who have already registered with the Trust as MLIs) with their viable proposals for their credit requirements. 

All Scheduled Commercial Banks (either PSU, Private or Foreign Banks), select Regional Rural Banks, or such of those institutions as may be directed by GOI can avail of guarantee cover in respect of their eligible credit facilities under the Scheme. Small Industries Development Bank of India (SIDBI), National Small Industries Corporation Ltd (NSIC) and North Eastern Development Finance Corporation Ltd (NEDFI) have been included as eligible institutions.

CGTMSE gives guarantee to its MLIs. Therefore, entrepreneurs in the Micro and small enterprises sector have to approach the Banks or financial institutions (who have already registered with the Trust as MLIs) with their viable proposals for their credit requirements.