CGTMSE Scheme

CGTMSE Scheme: Credit Guidelines for MSME Borrowers (2026)

Updated 01-Oct-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 Plan your funding against the ₹10 Crore limit, not the outdated one.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 entrepreneurs, and micro and small enterprises promoted by Agniveers: 90 percent.
SC/ST entrepreneurs: 85 percent.
ZED-certified enterprises: 85 percent.
Enterprises in aspirational districts: 85 percent.
Persons with disability, and transgender entrepreneurs: 85 percent.
Micro enterprises for facilities up to ₹5 lakh: 85 percent.
North-East, Jammu & Kashmir, and Ladakh: 80 percent up to ₹50 lakh, 75 percent above that.

Enterprises in identified credit-deficient districts receive an additional 5 percent over whichever band otherwise applies.

What the scheme costs

The scheme's own cost is the Annual Guarantee Fee. The Trust demands it from the lender, which passes it on to the borrower. It is charged on the guaranteed amount in the first year and on the outstanding balance after that.

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.

CGTMSE at a glance (FY 2026-27)

Ceiling	Banks and select FIs: up to ₹10 Cr per borrower (from 01-Apr-2025, CGTMSE Circular 250/2024-25). Small finance banks, RRBs and co-operative banks: lower ceilings.
Guarantee cover	75% standard; 90% women-owned enterprises; 85% SC/ST-owned, ZED-certified, aspirational districts and micro loans up to ₹5 lakh; 80% North-East region up to ₹50 lakh.
Annual guarantee fee (AGF)	0.37% to 1.20% a year by slab; first year on the guaranteed amount, then on the outstanding.
Who	Micro and small enterprises in manufacturing, services and retail / wholesale trade (medium enterprises are not covered).
Covers	Term loans and working capital (CC / OD), including non-fund-based limits.
Collateral	None, and no third-party guarantee for the guaranteed facility; funded assets are hypothecated.

The ceiling is a limit, not an entitlement: the lender still appraises turnover, cash flow, banking conduct and repayment capacity.

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.

How to apply for the CGTMSE scheme?

A business does not apply to CGTMSE directly. You apply to an eligible lender - one of the banks or financial institutions registered with CGTMSE (a Member Lending Institution) - for a term loan or working-capital limit; if the proposal fits, the lender seeks the CGTMSE guarantee and pays the annual guarantee fee.

Check the business is a micro or small enterprise with Udyam registration.
Prepare the documents below.
The lender appraises turnover, cash flow, banking conduct and repayment capacity.
The lender sanctions and covers the facility under CGTMSE.

What documents do you need for a CGTMSE loan?

3 years ITR and audited financials
12 months statements of all current and cash-credit accounts
GST returns
KYC of the business and promoters
Udyam registration certificate
Existing sanction letters and loan statements
Projections for the current and next year

The full list: CGTMSE loan documents required.

Official sources

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. Cover is 90 percent for women entrepreneurs and for enterprises promoted by Agniveers, and 85 percent for SC/ST entrepreneurs, ZED-certified enterprises, enterprises in aspirational districts, persons with disability, transgender entrepreneurs, and micro enterprises for facilities up to ₹5 lakh. Enterprises in identified credit-deficient districts receive an additional 5 percent over whichever band otherwise applies.

What fee does the borrower pay?

An Annual Guarantee Fee from 0.37 percent to 1.20 percent, depending on loan size. The Trust demands it from the lender, which passes it on to the borrower. It is charged on the guaranteed amount in the first year and on the outstanding balance after that.

Is ₹10 Cr available at all banks?

No. ₹10 Cr is the ceiling for banks and select FIs; small finance banks, RRBs and co-operative banks have lower ceilings, and every lender appraises the proposal.

Does CGTMSE cover working capital?

Yes - term loans and working capital (CC / OD), including non-fund-based limits, for eligible micro and small enterprises.

Does Credit Core Finance lend?

No. We are an independent MSME credit advisory; we prepare the credit file and approach lenders, and the lender decides.

Is there a turnover limit for CGTMSE eligibility?

CGTMSE covers micro and small enterprises as classified under Udyam (by investment and turnover); medium enterprises are not covered. Separately, the lender sizes the loan on your turnover and cash flow.

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.