Revamped CGTMSE to come into effect from 1st April 2023

New Delhi, Mar 31 (KNN) The revamping of Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE) announced by Union Finance Minister Nirmala Sitharaman in the Union Budget 2023-24 will come into effect from 1 April, 2023.

It will be applicable 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 per cent.

The corpus of CGTMSE has been infused with a sum of Rs 8,000 crore on Thursday.

CGTMSE has issued guidelines regarding reduction of annual guarantee fee for loans upto Rs 1 crore from a peak rate of 2 per cent per annum to as low as 0.37 per cent per annum.

This will reduce the overall cost of credit to the Micro & Small Enterprises to a great extent.

The limit on ceiling for guarantees has been enhanced from Rs 2 crore to Rs 5 crore.

For settlement of claims in respect of guarantees for loan outstanding upto Rs 10 lakh, initiation of legal proceedings will no longer be required.

CGTMSE created a new landmark by touching the milestone figure of approving guarantees worth Rs 1 lakh crore during FY 2022 - 23.  (KNN Bureau)