Lok Sabha Question No. 4698 (UNSTARRED), answered on 2025-08-21
Subject: Credit Guarantee Scheme
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Malaiyarasan D

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 4698 TO BE ANSWERED ON 21.08.2025

## CREDIT GUARANTEE SCHEME

4698.

SHRI MALAIYARASAN D:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the details of the Credit Guarantee Scheme including its objectives, eligibility criteria and coverage;
- (b) the number of Micro, Small and Medium Enterprises (MSMEs) that have availed benefits under the Credit Guarantee Scheme during the last three years in the State of Tamil Nadu;
- (c) whether the Government has undertaken any evaluation or impact assessment of the Credit Guarantee Scheme to measure its effectiveness in promoting MSME growth and access to finance;
- (d) the steps being taken to expand the scope of the Credit Guarantee Scheme to ensure greater access to credit, particularly for MSMEs in rural areas or those in emerging sectors; and
- (e) whether  the  Government  is  considering  to  bring  any  reforms  to  the  Credit  Guarantee Scheme and if so, the details thereof?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

- (a): The  Ministry  of  Micro,  Small  and  Medium  Enterprises  (MSME)  implements  the  Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with an objective to provide credit guarantees to its Member Lending Institutions for the credit facilities extended by them to the MSEs without any collateral security and third-party guarantee. Guarantee ceiling under the Scheme is Rs.10 crore per borrower and the extent  of  guarantee  coverage  ranges  from  75%  to  90%,  as  per  the  category  of borrower and /or geographical region.
- (b): The total number of guarantees extended to MSEs under the Scheme in the last three years in the State of Tamil Nadu is as follows:

| CGS - Guarantees Approved- Tamil Nadu   | CGS - Guarantees Approved- Tamil Nadu   | CGS - Guarantees Approved- Tamil Nadu   |
|-----------------------------------------|-----------------------------------------|-----------------------------------------|
| Financial Year                          | No. of Guarantees approved              | Amount approved (in Rs. Crore)          |
| 2022-23                                 | 61,883                                  | 7,114                                   |
| 2023-24                                 | 1,13,815                                | 15,061                                  |
| 2024-25                                 | 1,79,817                                | 21,447                                  |

(c): To measure the effectiveness of CGS in promoting MSEs growth and access to finance, the Government has undertaken evaluation study of the Scheme in 2017 and 2021.

(d) and (e): To expand the scope of the Scheme and to ensure greater access to credit for MSEs, including  those  in  rural  areas  and  in  emerging  sectors,  CGS  was  revamped  effective  from 01.04.2023, following a corpus infusion of Rs. 9,000 crore into CGTMSE. As part of the revamp, the ceiling of  guarantee  coverage was enhanced from Rs. 2 crore to Rs.5 crore and the Standard Rate of the Annual Guarantee Fee (AGF) was reduced by 50%, to as low as 0.37% per annum.

Further, the Ministry of MSME, Government of India, has recently enhanced the ceiling of guarantee coverage from Rs.5 crore to Rs.10 crore and has rationalised the Annual Guarantee Fee for guarantees above Rs.1 crore, effective from 01.04.2025.

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