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This Frequently Asked Questions (FAQ) document provides clear answers for Micro and Small Enterprises (MSEs) in the construction and infrastructure sector seeking collateral-free business loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme. To learn more about broader national manufacturing support programs, visit the Make in India scheme page, view the CGTMSE scheme page, or run the Eligibility Wizard to see how this program aligns with your business parameters.
What is CGTMSE?
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a trust set up by the Government of India and the Small Industries Development Bank of India (SIDBI) to provide credit guarantee coverage to financial institutions that offer collateral-free loans to eligible micro and small businesses [https://www.cgtmse.in].
Can my construction startup get a collateral-free loan under this scheme?
Yes, micro and small enterprises engaged in civil construction, infrastructure contracting, construction equipment hiring, and building material manufacturing are fully eligible to apply for loans secured by the trust [https://www.cgtmse.in].
What is the maximum loan amount covered under CGTMSE?
You can apply for collateral-free credit facilities (including term loans and working capital) up to a maximum limit of ₹5 crore under the scheme [https://www.cgtmse.in].
Do I need to provide any collateral or third-party guarantee?
No, the scheme guarantees your loan facility without requiring you to provide physical assets, property documents, or third-party guarantees to the lending institution [https://www.cgtmse.in].
Is Udyam Registration mandatory to get CGTMSE cover?
Yes, Udyam Registration is a compulsory prerequisite for the scheme, and your lending bank must enter your Udyam Registration Number (URN) during the online application process [https://www.cgtmse.in].
What are the fees or costs involved in securing this guarantee?
Borrowers are required to pay an Annual Guarantee Fee (AGF) which ranges from 0.37% to 1.35% of the sanctioned loan amount, depending on the loan size, location, and the category of the enterprise [https://www.cgtmse.in].
Can I apply for CGTMSE coverage directly on the trust's portal?
No, you cannot apply to the trust directly. The collateral-free guarantee application must be processed, approved, and submitted by your lending bank or financial institution [https://www.cgtmse.in].
What happens if my construction business defaults on the loan?
The trust settles up to 85% of the outstanding default amount with the lender depending on the borrower category, and the lender will initiate legal recovery actions against your business assets for the remaining balance [https://www.cgtmse.in].
Where can I get official support if my question is not answered here?
You can contact the official helpdesk or file a query through the integrated grievance management system on the CGTMSE portal [https://www.cgtmse.in].