The Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) Scheme has approved a credit guarantee of Rs. 1 lakh crore in just 7 months of the current financial year 2023-24.
About Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) Scheme
- It was launched in 2000.
- Funding: The corpus of CGTMSE is being contributed by the Government of India and Small Industries Development Bank of India (SIDBI) in the ratio of 4:1.
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is jointly set up by Ministry of Micro, Small & Medium Enterprises (MSME), Government of India and Small Industries Development Bank of India (SIDBI) to catalyse flow of institutional credit to Micro & Small Enterprises (MSEs).
- CGTMSE has been instrumental in providing guarantee cover to collateral and/or third party guarantee free credit facilities extended by eligible Member Lending Institution [MLIs] to MSEs.
Key points about Small Industries Development Bank of India
- It was established under an Act of Parliament in 1990.
- It is the Principal Financial Institution engaged in the promotion, financing & development of the Micro, Small and Medium Enterprises (MSMEs) sector and the coordination of the functions of the various institutions engaged in similar activities.
- The main objective of SIDBI is to offer loans (both direct and indirect) to MSMEs to help in addressing the development and financial gaps in the ecosystem of MSMEs.
- SIDBI helps MSMEs in acquiring the funds they require to grow, market, develop and commercialize their technologies and innovative products.
- It was made responsible for administering the Small Industries Development Fund and National Equity Fund.
Q1) What is an enterprise?
It is a large-scale organization with a composite structure. Enterprise companies often have multiple divisions, each with its specialized function. For instance, a multinational corporation may have a marketing department, manufacturing infrastructure, legal team, and resources for launching new projects.