CGTMSE Scheme: Credit Guidelines for MSME Borrowers (2026)
Most small businesses hit the same wall. The bank wants property as security, and the promoter does not have it to give. The CGTMSE scheme exists to remove that wall. It lets a viable business borrow against its cash flow, with a government trust standing behind the loan instead of a mortgage. Banks advertise. Brokers claim. CCF grades.
This page sets out how the scheme works today, with the current limits, cover, and fees.
How much you can borrow
The ceiling under the CGTMSE scheme is ₹10 Crore per eligible business. This came into effect on 1 April 2025 and applies to public sector banks, private banks, foreign banks, and select financial institutions. Smaller lender categories such as small finance banks and regional rural banks continue at lower ceilings.
Many pages online still show ₹5 Crore. That figure is old. Plan your funding against the ₹10 Crore limit, not the outdated one.
What the guarantee covers
The trust takes on a large share of the lender's risk if the loan goes bad. That is what lets a bank approve funding on the strength of the business rather than on property.
For general-category borrowers the cover is 75 percent of the sanctioned amount. On a ₹10 Crore loan, that is ₹7.5 Crore of guarantee backing. Several categories qualify for higher cover:
- Women-owned units: 90 percent.
- SC/ST and ZED-certified units: 85 percent.
- Aspirational-disewtrict units: 85 percent.
- North-East, Jammu & Kashmir, and Ladakh: 80 percent.
- Micro units up to ₹5 lakh: 85 percent.
No outside collateral and no third-party guarantee is needed under the primary cover.
What the scheme costs
The borrower pays an Annual Guarantee Fee on the cover. It is charged on the guaranteed amount in the first year and on the outstanding balance after that. The rate rises with loan size:
- Up to ₹10 lakh: 0.37 percent.
- ₹10 lakh to ₹50 lakh: 0.55 percent.
- ₹50 lakh to ₹1 Crore: 0.60 percent.
- ₹1 Crore to ₹2 Crore: 0.85 percent.
- ₹2 Crore to ₹5 Crore: 1.00 percent.
- ₹5 Crore to ₹8 Crore: 1.10 percent.
- ₹8 Crore to ₹10 Crore: 1.20 percent.
Who can apply
New and existing manufacturing units qualify. So do most service businesses. Retail and wholesale trade are covered too, on the same terms as other activities where the lender is eligible for the full ceiling.
The bank looks first at whether the project stands up and whether the business can repay. One requirement is fixed for everyone. A valid Udyam Registration must be in place before the guarantee can be set up.
Working out how the scheme fits your own numbers is where most applications go wrong. If you are raising funds locally, our team handles CGTMSE loan facilitation in Pune from assessment to sanction. Call +91 89563 34991.
Frequently Asked Questions
What is the maximum loan under the CGTMSE scheme?
Up to ₹10 Crore per eligible business, effective 1 April 2025. It covers both working capital and term loans, with no real-estate security.
How much of the loan does the guarantee cover?
For general-category borrowers, 75 percent of the sanctioned amount. Women-owned units get 90 percent, and SC/ST, ZED-certified, and aspirational-district units get 85 percent.
What fee does the borrower pay?
An Annual Guarantee Fee from 0.37 percent to 1.20 percent of the cover, depending on loan size. It is charged on the guaranteed amount in the first year and on the outstanding balance after that.
Can a retail trading business apply?
Yes. Retail and wholesale trade are eligible on the same coverage and fee terms as other activities, subject to the lender's category ceiling.