Lok Sabha Question No. 343 (STARRED), answered on 2024-12-19
Subject: Credit Guarantee Fund Trust for Micro and Small Enterprises
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Alok Sharma, Shri Balabhadra Majhi

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

## LOK SABHA STARRED QUESTION NO. 343 TO BE ANSWERED ON 19.12.2024

## CREDIT GUARANTEE FUND TRUST FOR MICRO AND SMALL ENTERPRISES

## *343. SHRI ALOK SHARMA: SHRI BALABHADRA MAJHI:

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

- (a) the specific measures taken by the Government to ensure that the additional amount of Rupees five lakh  crore  in  credit  guarantees  has  effectively  been  received  by  micro  and  small  enterprises  across  the country, particularly those in underserved regions like Maharashtra and Jalgaon district;

(b) the steps taken by the Government to identify and address the unique challenges faced by micro and small enterprises in underserved areas across the country, including Jalgaon district, in accessing the credit guarantees through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme;

- (c) the steps taken by the Government to address potential barriers such as lack of financial literacy, documentation  or  awareness  among  micro  and  small  enterprises  across  the  country,  particularly  in Maharashtra to help them benefit from these credit guarantees;

(d) the manner in which Jalgaon district specifically leverage the CGTMSE Scheme to support local micro and small enterprises; and

(e) the  role  of  local  stakeholders  in  ensuring  the  effective  distribution  and  utilization  of  these  credit guarantees in the country?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI JITAN RAM MANJHI)

(a) to (e): A statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) to (e) OF THE LOK SABHA STARRED QUESTION NO. *343 FOR ANSWER ON 19.12.2024.

- (a): It  was  announced in Union Budget 2022-23 that Credit Guarantee Scheme (CGS) for Micro and Small  Enterprises  (MSEs)  will  be  revamped  with  the  required  infusion  of  funds  to  facilitate  additional credit of Rs. 2 lakh crore for MSEs. Accordingly, Rs. 9,000 crore was infused as an addition to the existing corpus of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to ensure facilitation of  additional  Rs.  2  lakh  crore  of  guarantee  coverage  in  subsequent  four  financial  years.  This  target  has since been achieved across the country, including Maharashtra and Jalgaon district. The details of credit guarantees approved under CGTMSE are as follows:
- (b) and (c): The  Credit  Guarantee  Scheme  (CGS)  for  Micro  and  Small  Enterprises  (MSEs)  was revamped  with  effect  from  01.04.2023  to  better  address  the  challenges  faced  by  MSE  borrowers  and Member Lending Institutions (MLIs) for effective implementation of the scheme in the country, including Maharashtra, as detailed below:
- i. A revised guarantee fee structure was introduced with 50% reduction in the Annual Guarantee Fees from peak rate of 2% per annum to as low as 0.37% per annum.
- ii. The guarantee ceiling was increased from Rs. 2 crore to Rs. 5 crore.
- iii. The limit for waiver of legal action was increased from Rs. 5 lakh to Rs. 10 lakh.

| Amount of Credit Guarantees approved by CGTMSE, (Rs. in crore)   | Amount of Credit Guarantees approved by CGTMSE, (Rs. in crore)   | Amount of Credit Guarantees approved by CGTMSE, (Rs. in crore)   | Amount of Credit Guarantees approved by CGTMSE, (Rs. in crore)   |
|------------------------------------------------------------------|------------------------------------------------------------------|------------------------------------------------------------------|------------------------------------------------------------------|
|                                                                  | 2022-23                                                          | 2023-24                                                          | 2024-25 (till 30.11.2024)                                        |
| All India                                                        | 1,04,781                                                         | 2,02,807                                                         | 1,50,425                                                         |
| Maharashtra                                                      | 11,926                                                           | 23,359                                                           | 18,958                                                           |
| Jalgaon                                                          | 143                                                              | 309                                                              | 261                                                              |

In addition, the following steps were taken to enhance credit flow:

- i. Additional concession of 10% in guarantee fee is provided to SC/ST owned MSEs, MSEs owned by Person  with  Disability,  ZED  certified  MSEs,  MSEs  situated  in  Aspirational  Districts  and  MSEs located in North East Region (including Sikkim), UT of Jammu & Kashmir and UT of Ladakh.
- ii. The extent of guarantee coverage is 85% for SC/ST owned MSEs, MSEs owned by Person with Disability,  ZED  certified  MSEs,  MSEs situated  in  Aspirational  Districts,  MSEs  located  in  North East Region (including Sikkim), UT of Jammu & Kashmir and UT of Ladakh, vis-a-vis 75% for others.
- iii. The extent of guarantee coverage for women owned MSEs has been increased from 85% to 90% vide notification dated 10.12.2024.
- iv. To  promote  credit  flow  to  MSEs  in  Identified  Credit  Deficient  Districts  (ICDD)  as  per  RBI, CGTMSE  offers  10%  discount  on  the  Annual  Guarantee  Fees  and  extend  an  additional  5% guarantee coverage.
- v. CGTMSE introduced 'Special Provision for the  Informal Micro Enterprises (IME)' under Credit Guarantee Scheme on 14.02.2024. The guarantee covers credit facilities up to Rs. 20 lakh with 85% coverage, with no primary security required, and a guarantee fee of 0.37% for up to Rs. 10 lakh and 0.45% for Rs. 10 lakh to Rs. 20 lakh.
6. (d): To support local  MSEs in  the  district  of  Jalgaon,  CGTMSE  has  extended  guarantee  coverage  to 16,231 MSEs amounting to Rs 1,104 crore, since inception in 2000-2001 till 30.11.2024.
7. (e): To ensure effective distribution and utilisation of credit guarantees, CGTMSE, in association with stakeholders  such  as  Small  Industries  Development  Bank  of  India,  MLIs,  MSME  Associations,  field offices of Ministry of MSME, etc. and in coordination with MSME/Industry Departments of States/UTs concerned, including Maharashtra, organises awareness programmes across the country.

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