#cgtmse fee

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Find out how easy it is to apply for a loan with CGTMSE online. In this long course, we offer guidance, tips, and comprehensive, illustrated instructions for a basic application. Find out more information on the affordability of CGTMSE loans right now.

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CGTMSE scheme: Full form, eligibility criteria, subsidies, and more

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme is an initiative that plays a crucial role in promoting entrepreneurship and fostering the growth of Micro, Small, and Medium Enterprises (MSMEs) in India. This scheme, introduced by the Government of India and the Small Industries Development Bank of India (SIDBI), aims to provide financial assistance and credit facilities to MSMEs by offering guarantees on their loans. In this article, we will delve into the details of the CGTMSE scheme, including its full form, eligibility criteria, subsidies, and more.

Understanding the full Form of the CGTMSE scheme

 CGTMSE stands for the Credit Guarantee Fund Trust for Micro and Small Enterprises scheme. The primary objective of this scheme is to facilitate access to credit for MSMEs, which often face challenges in obtaining loans due to a lack of collateral or inadequate credit history. By providing guarantees on credit facilities extended to eligible enterprises, the CGTMSE scheme aims to mitigate the risk for financial institutions and encourage them to lend to MSMEs.

Eligibility criteria for the CGTMSE scheme

To avail the benefits of the CGTMSE scheme, enterprises must meet certain eligibility criteria. Under the scheme, MSMEs are classified based on their investment in plant and machinery or equipment for manufacturing enterprises, and service sector enterprises. The turnover and investment limits for micro, small, and medium enterprises are defined by the Government of India and are periodically revised.

The scheme encompasses both manufacturing and service sector enterprises, including retail units, ensuring a wide range of businesses can benefit from it. It covers industries such as textiles, food processing, engineering, information technology, healthcare, and more.

Benefits and subsidies under CGTMSE scheme

The CGTMSE scheme provides several benefits and subsidies to eligible MSMEs. One of the primary benefits is the guarantee cover provided on credit facilities extended to these enterprises. The guarantee cover typically ranges from 50-85% of the sanctioned loan amount, depending on the category of the enterprise. This guarantee encourages banks and other financial institutions to extend credit to MSMEs, as it minimises the risk associated with lending to these enterprises.

This scheme covers both term loans and working capital loans. This allows MSMEs to access funds for various purposes, including purchasing machinery, expanding infrastructure, meeting working capital requirements, and more. The scheme provides flexibility to enterprises, enabling them to address their specific financial needs.

Additionally, the scheme offers subsidies on guarantee fees and annual service fees payable by the MSMEs. This helps reduce the financial burden on the enterprises and makes the scheme more affordable and accessible.

Application process for CGTMSE scheme

The application process for the CGTMSE scheme is relatively straightforward. MSMEs interested in availing the benefits of the scheme need to approach eligible lending institutions, such as banks, financial institutions, or Non-Banking Financial Companies (NBFCs). These institutions are registered with CGTMSE as Member Lending Institutions (MLIs).

The application requires the submission of certain documents and information, such as proof of identity, proof of address, financial statements, project reports, and other relevant details. The lending institutions assess the viability and creditworthiness of the enterprise based on these documents.

Once the application is submitted, the lending institution forwards it to the CGTMSE for approval. The CGTMSE evaluates the application and, upon approval, issues the necessary guarantee to the lending institution. The entire process, from application submission to approval, is usually completed within a reasonable timeframe.

Limitations and challenges of CGTMSE scheme

While the CGTMSE scheme has been instrumental in facilitating credit access for MSMEs, it also faces certain limitations and challenges. One limitation is the exclusion of certain types of enterprises from the scheme, such as educational institutions, agricultural activities, self-help groups, and more. Additionally, the risk assessment and default management processes pose challenges for the effective implementation of the scheme.

Another challenge is the limited awareness and outreach of the CGTMSE scheme. Many MSMEs, especially in rural and remote areas, remain unaware of the scheme's existence and its potential benefits. Addressing these limitations and challenges is crucial to ensure the scheme reaches its full potential and benefits a larger number of deserving enterprises.

Disclaimer: Please note that the information provided in this article is intended for general informational purposes only and should not be construed as professional advice or relied upon as a substitute for consultation with qualified experts. The accuracy, completeness, and timeliness of the information presented in this article may vary and are based on the knowledge and resources available at the time of writing, which may not be comprehensive or up-to-date.

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Trademark Registration Fees in India for MSME: What You Need to Know

Small and medium-sized enterprises (SMEs) play a critical role in the Indian economy. MSME registration in India has become an essential tool for such businesses, offering a range of benefits such as financial assistance, subsidies, and exemptions. In this article, we'll discuss how to make the most of MSME registration benefits.

What is MSME Registration?

Before we delve into the benefits of MSME registration online, it's essential to understand what it entails. MSME stands for Micro, Small, and Medium Enterprises. The Indian government introduced this registration to facilitate the growth and development of such businesses in the country. MSME registration India is a voluntary process that can be done online or offline.

Who is eligible for MSME Registration?

Any business in India that meets the following criteria is eligible for MSME registration :

Micro Enterprises: An enterprise with an investment of up to Rs. 1 crore and a turnover of up to Rs. 5 crores.

Small Enterprises: An enterprise with an investment of up to Rs. 10 crores and a turnover of up to Rs. 50 crores.

Medium Enterprises: An enterprise with an investment of up to Rs. 50 crores and a turnover of up to Rs. 250 crores.

MSME Registration Process:

The MSME registration process is straightforward and can be completed in a few easy steps:

Visit the official website of the Ministry of Micro, Small and Medium Enterprises.

Fill in the necessary details, such as the name of the enterprise, PAN number, and Aadhaar number.

Submit the required documents, including proof of address, bank details, and business registration documents.

Pay the registration fee, which is nominal.

MSME Registration Documents Required:

You will need to provide the following for the MSME registration documents required:

Aadhaar card of the owner

PAN card of the owner

Business registration documents

Bank account details

Proof of address

MSME Registration Benefits:

Now that we have a clear understanding of MSME registration let's discuss its benefits:

Financial Assistance:

MSMEs can apply for financial assistance from the government and financial institutions. The government provides various schemes, such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, to offer financial assistance to MSMEs. MSMEs can also apply for loans from financial institutions, such as banks, at a lower interest rate.

Tax Benefits:

MSMEs are eligible for several tax benefits, such as exemptions from GST registration, income tax, and capital gains tax. Additionally, MSMEs with a turnover of up to Rs. 5 crores are eligible for a composition scheme, which allows them to pay a lower rate of tax.

Access to Government Tenders:

MSMEs registered with the government are eligible to apply for government tenders, which can be a significant source of revenue. The government has also reserved a specific percentage of tenders for MSMEs to encourage their participation.

Trademark Registration Fees:

MSMEs are eligible for a discount on trademark registration fees in India. The fee for a trademark application is Rs. 9,000, but MSMEs only have to pay Rs. 4,500.

Tips to Make the Most of MSME Registration Benefits:

Now that you know the benefits of MSME registration let's discuss how to make the most of them:

Maintain Proper Records:

To access financial assistance and tax benefits, it's essential to maintain proper records of all business transactions. This includes maintaining records of all purchases, sales, and expenses.

Apply for Government Schemes:

MSMEs should explore and apply for various government schemes to avail financial assistance and subsidies. The government offers several schemes that are specific to various industries, such as the Technology Upgradation Fund Scheme (TUFS) and the Credit Linked Capital Subsidy Scheme (CLCSS).

Participate in Trade Fairs:

Trade fairs are a great platform for MSMEs to showcase their products and services to potential customers and investors. The government also conducts various trade fairs and exhibitions, where MSMEs can participate and interact with potential buyers and investors.

Utilize Online Marketplaces:

With the increasing use of the internet, online marketplaces have become a popular platform for businesses to sell their products and services. MSMEs can leverage these marketplaces to expand their reach and customer base.

Conclusion:

MSME registration offers several benefits to small and medium-sized enterprises in India. Financial assistance, tax benefits, access to government tenders, and trademark registration fee discounts are some of the significant benefits that MSMEs can avail themselves of. By maintaining proper records, applying for government schemes, participating in trade fairs, and utilizing online marketplaces, MSMEs can make the most of these benefits and drive their growth and development.

FAQs:

1.How long does it take to get MSME registration?

Ans: The MSME registration process usually takes 2-3 working days.

2.Is MSME registration mandatory for businesses in India?

Ans: No, MSME registration is voluntary.

3.Can a business have multiple MSME registrations?

Ans: No, a business can only have one MSME registration.

4.How long is the validity of MSME registration?

Ans: MSME registration is valid for a lifetime.

5.Is MSME registration applicable to all industries?

Ans: Yes, MSME registration is applicable to all industries, including manufacturing and service sectors.

[yesqolaris-blog]

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Learn about CGTMSE - Full Form ✔ CGTMSE Scheme ✔ Eligibility Criteria Details ✔ Fee ✔ Know how to get loan under CGTMSE scheme. To know more read our blog page

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CGTMSE scheme FAQs

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a trust inaugurated by the Ministry of Micro, Small and Medium Enterprises, Government of India, and the Small Industries Development Bank of India (SIDBI). Launched on 30 August 2000, the main purpose of the CGTMSE scheme is to provide credit guarantees to financial institutions that grant loans to SMEs and Memes.

What is CGTMSE Meaning?

The basic purpose of CGTMSE is to encourage first-time entrepreneurs to build SME and MEME, estimated to be the support of the Indian economy by availing collateral-free loans from qualified financial institutions. The guarantee includes default by the borrower to repay the advance. Thus, the CGTMSE scheme essentially considers the requirement of loans to first-generation administrators so that they can flourish in a competitive environment without the burden of security or third-party guarantees. In turn, the financial institutions are given cover for the lack of security to fund SMEs and Memes promoted by small Indian businessmen up to a certain limit.

CGTMSE – A Driving Force for MSMEs

What is CGTMSE Fees?

The fees charged by the trust fund is of 1% p.a of the amount so approved:

1. 0.75% – for loan of up to Rs. 5 Lac

2. 0.85% for loans above Rs. 5 Lac but up to Rs. 100 Lac.

 The credit guarantee available below this scheme is 75/80% of the amount so transmitted to a maximum cap of Rs. 62.5 Lac / 65 Lac for a loan facility of up to Rs. 50 Lac. The percentage guarantee implies 85% for micro-enterprises for a sum of up to Rs. 5 Lac. The percentage of guarantee is 50% of the amount so approved for a credit of above Rs. 50 Lac with a maximum limit of Rs. 100 Lac. The ownership of the guarantee is a block of 5 years.

Does CGTMSE cover retail trade?

CGTMSE Coverage extended to Retail Trade & Collateral Loans too – Now Retail Trades & partial collateral loans may be included under Credit Guarantee Scheme of CGTMSE. A decision in this opinion was taken under “Rebooting CGTMSE” established by the Ministry of MSME and CGTMSE on February 20, 2018.

 Following modifications were suggested for implementation:

1. Charging Annual Guarantee Fees (AGF) on Outstanding Loan Amount somewhat than sanction amount.

2. Extending the Coverage of the Credit Guarantee Scheme (CGS) to cover the MSE Retail Traders section.

3. Providing loans with Partial Collateral Security “Hybrid Security” under Credit Guarantee Scheme.  

4. Increase in the extent of guarantee coverage to 75% from existing 50% for proposals above ₹50 Lac.

5. Intensifying IT infrastructure of the Trust to develop operational efficiencies and reduce the turnaround time for claim settlement.  

6. Augmentation of the corpus of the Trust from Rs. 2,500 crore to Rs. 7,500 crore

7. To increase coverage of the loans covered under the credit guarantee scheme from Rs. 1 crore to Rs. 2 crore

8. To increase coverage of the credit guarantee scheme for loans being enlarged to micro and small enterprises by NBFCs also.

Understand CGTMSE scheme execution.

What is CGTMSE Loan Interest Rate?

All lenders impose a particular cost to the borrower. The important part of the cost to the borrower is the interest rate for the loan. The majority of the lenders recover CGTMSE loan interest rate that does not exceed 14% PA including the guarantee cover. Most of the time the rate of interest varies as per change in the financial institutions and the facility which is available under CGTMSE.

What is CGTMSE Full form?

The full form of CGTMSE is Credit Guarantee Fund Trust for Micro and Small Enterprises that gives funding to financial institutions to help SMEs and MSMEs.

How to apply for the CGTMSE Scheme?

To apply for a CGTMSE loan, you are required to set up a business plan including business model, projected goal, etc., and obtain certain business documents if you have just registered your business. Once you have all the essential documents and business plans prepared by a professional, you can apply for the loan with eligible moneylenders. They will analyse your business model and application. If the bank is satisfied, it will process the request to CGTMSE for getting a guarantee cover and confirm the loan amount after CGTMSE approves your application and you pay CGTMSE loan fees.

It reaches out even to the rural areas. The application can be made particularly if the applicant is eligible for a loan under the CGTMSE scheme.

How does Terkar Capital help in getting CGTMSE Exposure?

For many years Terkar Capital has worked extensively and exclusively for raising the finances for the businesses. With respect to the company and its financials we arrange the source of the funding for the companies. And CGTMSE loan is among them. There are many financial facts, figures that need to be considered before one shall proceed on the CGTMSE. We analyse the financials, business and arrange the whole execution with the best suits facility under CGTMSE.

[letscomply]

What are the Advantages of an MSME/SSI Registration?

What Are the Advantages of an MSME/SSI Registration- The economic aspirations of every nation hang on its small and young businesses. And the Indian government, considering this, offers many benefits to these organizations in order to achieve growth with less difficulty. To take advantage of these benefits, eligible organizations must obtain an MSME or SSI registration (regulated by the Private Services Act), which is among the easiest government records to be granted.

Important facilities in India

MSME (Establishments) India, which represents approximately 40% of the total industrial value and 45% of the total direct and indirect exports. Next, the government has introduced various schemes and aid to ensure that the project leads a conflict-free presence in the country and also contributes to the Indian economy. The central government has started some of these plans, while the state government has promoted others. To take advantage of it, however, I needed to register Udyog Adhar.

Register a Company

Virtual-CFO

MSME Registration

Income Tax Return

FSSAI registration

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Benefits of MSME Logging

Benefits from banks: All banks and other financial institutions recognize facilities and establish special schemes for them. This usually includes lending to the priority sectors, which means that the probability of loan approval is high, and bank interest rates are low. There may also be preferential treatment in case of late payment.

Tax advantages: According to your business, you can enjoy a system of excise from excises as well as exempt from some direct taxes in the first years of your business.

State government subsidies: Most states provide those who have been registered under the Government Financial Services Act with subsidies on power, taxes, and entry to industrial properties run by the state. In particular, there is an exemption from sales tax in most states, and the purchase of preferences overproduced goods.

Central government benefits: The central government announces, from time to time, plans to take advantage of facilities, such as the credit guarantee plan:

Credit Guarantee System (CGTMSE)

One of the main conflicts that small industries face is credit and income inputs from various sources to support them.

The credit guarantee system, provided for MSME support, comes with modifications to make it more useful for small merchants:

Notable features of the scheme include:

1.   Promote an optimum eligibility loan of Rs. 25 rupees lakh.

2.   Limiting the one-time collateral for loans that benefited from MSME in the northeastern region of India from 1.5% to 0.75%.

3.   Increasing the scope of guarantee coverage from 75% to 80% for the following:

4.   Women are running medium and small projects

5.   Micro projects, for loans of up to 5 lux

6.   Loans obtained in the northeastern region of the country

7.   Reducing the one-time guarantee fee for all loans used in northeast India from 1.5% to 0.75%.

In addition to these benefits, the government is also continuing, in a gradual way, to enhance the “List of Products Reserved for Purchase form MSME.” A detailed list can be found on the approved website.

Accordingly, the government is helping to use these product listings, to manufacture and supply these products to large-scale industries, and to make a profit in this process.

Support services provided by state governments:

Extended credit facility

Industrial extension support and services

Availability of advanced sites for building warehouses

Providing training facilities

Leasing – Purchase of machines for use in MSME

Marketing assistance, both inside and outside the country (exports)

Providing assistance to build industries in the underdeveloped regions

Technical consulting, DC assistance, and so on, to promote technology in MSME

MSME, next, has several support systems in the country as well as the center, in terms of both the start-up of a new project and its continued presence. The government also aims to provide trained professional resources, inputs, and capital flows through assistance from venture capitalists, and through private equity funds.

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Try the CGTMSE scheme for a credit facility.

All business demands consistent cash flow to maximize their growth possibilities. One of the most prominent barriers faced by micro, small and medium enterprises (MSMEs) is that it is challenging to get business loans from regular moneylenders due to scarcity of collateral and other assets. Without proper funding, MSMEs are unable to expand and grow.

Recognizing the critical role of MSMEs in the economy, the government of India has begun an innovative scheme like the Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE).

Here, in this article, we offer you insights on what is CGTMSE, how to apply, and its eligibility criteria.

What is the CGTMSE Scheme?

Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE) is a scheme launched by the Government of India, Ministry of Medium, Small and Micro Enterprises (MSME) and Small Industries Development Bank of India (SIDBI) collectively in 2000, focusing on various MSMEs.

The prime purpose of this scheme is to provide term loans and working capital loans up to 200 lakhs to the borrowers, even when they don’t have collateral or security. 

CGTMSE also grants credit guarantees to financial institutions that provide loans to MSMEs. If a borrower defaults on a payment, the CGTMSE trust fund will take care of the guarantee cover in the ratio of 50/75/80/85 percent of the acquired amount.

Who is eligible for CGTMSE?

Lenders: Mostly all commercial banks and specified regional rural banks including NSIC, SIDBI, and NEFDi can be eligible as lending institutions. 

The institutions that enter into an agreement with CGTMSE are Member Lending Institutions (MLIs).On May 31, 2016, 133 suitable Lending Institutions were launched as MLIs of the Trust.

Borrowers: All the existing and new MSMEs can apply for CGTMSE under the following conditions:

CGTMSE provides a maximum of 4crore of guarantee cover for the credit amount up to 5Cr.

In the case of micro-enterprises, the maximum limit for guarantee cover is up to 1.5Cr for credit facilities ranging from 50 lakh to 2 crores.

·Small and micro-enterprises run by women are eligible for a guarantee cover of 80%.

The following organizations are not suitable for the loan under CGTMSE scheme:

Retail Trade

Self Help Groups (SHG)

Training Institutes

Educational Institutions

Agriculture

How to apply for the CGTMSE loan scheme?

Formation of a Business Plan: The first step is to prepare a business plan including all the relevant information of the business, like the nature of the business, the requirement of funds, return on investments, payback periods, and other financial details of the business and its feasibility.

Approach an eligible Lender: The next step is to submit your business plan report to the lender and also Submit the CGTMSE business loan application form to the lender.

The sanction for Bank Loan: once the request for loan application has been made, the lending institutions analyze the business model and finally grant the loan if they meet the eligibility criteria.

Obtaining the Guarantee Cover:  Now the lender applies for the guarantee cover from the CGTMSE authority. Once the CGTMSE approves the loan, it also provides the guarantee cover to the banks /lenders.

Transaction of funds: After the approval, the banker issues the eligible amount and the borrower will bear a CGTMSE guarantee and service fee.

CGTMSE fee and charges:

A borrower needs to pay 1% per annum of the total amount to the lender as the service fee.

1. 0.75% for a loan of Rs 5 lakh and less.

2. 0.85% for a loan over Rs 5 lakh till Rs 100 lakh.

The tenure of the guarantee is for 5 years.

[businessplanmentor]

Credit Guarantee Fund Scheme for Micro and Small Enterprises

Of all the troubles faced by MSEs, the unavailability of timely and sufficient credit at a reasonable interest rate is one of the most important. One of the main causes of the scarce availability of bank financing for this sector is the high risk perception of banks in lending to MSEs and the consequent insistence on collateral that is not readily available with these companies. The problem is more serious for micro-enterprises applying for small loans and for first-generation entrepreneurs.

·         The Micro and Small Business Credit Guarantee Fund (CGS) scheme was launched by the Government of India (GoI) to make unsecured credit available to the micro and small business sector. Mutually existing and new businesses can be covered by the scheme. The Ministry of Small, Micro and Medium Enterprises, GoI and Small Industries Development Bank of India (SIDBI), has recognized a Trust called Credit Guarantee Fund Trust for Micro and Small Business (CGTMSE) to perform the Credit Guarantee Fund Scheme for Micro and Small Enterprises. The scheme was officially launched on August 30, 2000. The CGTMSE corpus was provided by the GoI and SIDBI in the ratio of 4: 1 respectively and contributed Rs. 2477.78 crore to the Trust corpus until 31 May 2016. As announced in the MSE Package, the corpus was to be raised to Rs. 2500 crore by the end of the 11th floor.

 ·         Eligible Lending Institutions the Banks / Financial Institutions, which can benefit from the scheme, are programmed commercial banks (Public sector banks / Private sector banks / Foreign banks) and selected rural banks (which have been classified in the 'Sustainable' category by NABARD). Till May 31, 2016, there were 133 eligible credit institutions registered as MLI of the Trust, including 26 public sector banks, 21 private sector banks, 73 regional rural banks (RRBs), 4 overseas banks and 9 other institutions, for example Delhi Financial Corporation, Kerala Financial Corporation, Jammu & Kashmir Development Finance Corporation Ltd, Andhra Pradesh State Financial Corporation, Bank such as Export and Import Bank of India and SIDBI.

 ·         Eligible credit facility the credit lines that can be covered by the scheme are both term loans and / or working capital line up to Rs. hundred lakh per borrower unit, extended without any collateral and / or third-party guarantee, to a new or existing micro and small businesses. For units covered by the guarantee scheme, which may become ill due to factors beyond management's control, rehabilitation assistance extended by the provider may also be covered by the guarantee scheme. Any credit line for which risks are further covered by a program, managed by the government or other agencies, will not be eligible for coverage under the program. Warranty coverage The coverage of the guarantee available under the scheme is up to a maximum of 85% of the sanctioned amount of the credit line. The coverage of the guarantee given is up to 75% of the credit line up to Rs.50 lakh (85% for loans up to Rs.5 lakh provided to micro-enterprises, 80% for MSE owned / managed by women and all loans to NER including Sikkim) with a uniform 50% guarantee for the full amount if the credit exposure is greater than Rs.50 lakh and up to Rs.100 lakh. In the event of default, the Trust terminates the credit up to 75% (or 85% / 80% / 50% where applicable) of the defaulted amount of the credit line extended by the credit institution. To this end, the defaulting amount is calculated as the principal amount outstanding in the borrower's account, in relation to the term loan, and the amount of outstanding working capital lines, including interest, at the date the account is transformed the impaired business (NPA). Duration of the guarantee the guarantee coverage under the scheme covers the agreed term of the term / composite loan. In the case of working capital, the coverage of the guarantee is 5 years or block of 5 years. Guarantee fee A composite total annual guarantee fee of 1.0% per annum. Of the sanctioned credit line (0.75% for the credit line up to Rs. Five lakh and 0.85% for over Rs. Five lakh and up to hundred lakhs for women, micro-enterprises and units in the NER including Sikkim) is now being charged. Scheme awareness programs The CGTMSE has adopted a multi-channel approach to raise awareness among banks, MSE sector associations, the MSE sector, etc. Through the press and the press, conducting workshops / seminars, participating in programs organized in various district / state / national forums, etc.

 ·         During the year CGTMSE participated in several seminars / workshops organized by MLI and sector associations, exhibitions and meetings organized by RBI / Govt. in connection with the MSE industry, across the country to create awareness of CGS. CGTMSE officials also held business development meetings with its member credit institutions.

 ·         Sustained press campaigns were conducted across the country throughout the year to improve visibility and create awareness of the program. Campaigns to disseminate information among the various stakeholders were vigorously conducted.

 ·         During the 2016 financial year, CGTMSE participated in 21 seminars / workshops / banker meetings / business development meetings and also gave presentations to raise awareness of bank officials / small businesses on various aspects of the credit guarantee system. The workshops / programs were generally organized by member banks / SIDBI / CGTMSE / sector associations, etc.

 CONTACT: Unit No.450, Mastermind One - IT Park, Royal Palms, Aarey Colony, Goregaon(E), Mumbai, Maharashtra 400065Ph:+91 8097027355, +91 9137256150, +91 9222086563 or visit http://franchisebirbal.com/

[hellotaxindia-blog]

4E (End to End Energy Efficiency) Launched in: September 2016 Headed by: Small Industries Development Bank of India (SIDBI) Industry: Sector-agnostic Eligibility: MSME startups in the manufacturing or services sector that have been operating for at least three years and have earned cash profits in the last two years are eligible for the loan. Here are the specific eligibility criteria. The startup should not be in default with any bank/financial institutions It should have undergone a process of detailed energy audit (DEA) through a technical agency/consultant that is a Bureau of Energy Efficiency (BEE)-certified energy auditor The detailed project report (DPR) prepared by the technical agency/consultant should have been vetted by the Energy Efficiency Cell (EEC), SIDBI The unit should not have availed a performance linked grant under the World Bank-Global Environment Facility (WB-GEF) Project for the proposed energy efficiency (EE) Project and should be in compliance with the Environment and Social Management Framework Overview: This MSME scheme for entrepreneurs has been launched jointly by India SME Technology Services Ltd (ISTSL) in association with World Bank. The main objective is to implement energy efficiency measures across Indian industries on an end-to-end basis. Also, it aims to help startups finance purchases of second-hand machinery/equipment. The business loans for startups under this scheme meet part costs of: capital expenditure, including for the purchase of equipment/machinery, installation, civil works, commissioning, etc. any other related expenditure required by the unit provided it is not more than 50% of capital expenditure. Fiscal incentives under the 4E scheme: The MSME startup has to pay only INR 30,000 and applicable taxes and the balance fee will be paid by SIDBI to auditors Up to 90% of the project cost with a minimum loan amount of INR 10 Lakh and a maximum loan amount not exceeding INR 150 Lakh per eligible borrower can be granted under this scheme. Eligible loan amount should not exceed one-fifth of the total turnover of the applicant unit. Time period: The repayment period, including the initial moratorium period of up to six months, shall not be more than 36 months for loans up to INR 100 Lakh and 60 months for loans beyond INR 100 Lakh. Bank Credit Facilitation Scheme Launched in: NA Headed by: National Small Industries Corporation (NSIC) Industry: Sector-agnostic Eligibility: MSMEs registered in India Overview: The scheme aims to meet the credit requirements of MSME units. The NSIC has entered into a MoU with various nationalised and private sector banks for the purpose. Through syndication with these banks, the NSIC arranges for credit support (fund- or non-fund-based limits) from banks without any cost to MSMEs. Fiscal incentives: NA Time period: The repayment period varies depending on the income generated from the startup and generally extends from five to seven years. However, in exceptional cases, it can go up to to 11 years. Credit Guarantee Scheme (CGS) Headed by: Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Industry: Sector-agnostic Eligibility: The scheme is applicable to new and existing MSMEs engaged in manufacturing or service activities, excluding retail trade, educational institutions, agriculture, self-help groups (SHGs), training institutions, etc. Overview: The Credit Guarantee Scheme was launched by the government to strengthen the credit delivery system and to facilitate the flow of credit to the MSME sector. The lending institutions under this scheme mainly include public, private, and foreign banks, along with regional rural banks and the SBI and its associate banks. Fiscal incentives: This MSME scheme for entrepreneurs comes with a number of benefits, including term loans and/or working capital loan facility up to INR 200 Lakh per borrowing unit. Here are some more details of the scheme: The guarantee cover provided is up to 75% of the credit facility up to INR 150 Lakh 85% of credit facility for loans up to INR 5 Lakh is provided to micro-enterprises 80% of credit facility for MSMEs owned/operated by women and all loans to NER including Sikkim 

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[vsplusonline]

Cabinet approves ₹3 lakh crore funding for MSMEs

New Post has been published on https://apzweb.com/cabinet-approves-%e2%82%b93-lakh-crore-funding-for-msmes/

Cabinet approves ₹3 lakh crore funding for MSMEs

The Union Cabinet on Monday approved additional funding of up to ₹3 lakh crore to micro, small and medium enterprises (MSME) that was announced by Finance Minister Nirmala Sitharaman last week as part of the ₹20 lakh crore economic package.

Under the scheme, 100% guarantee coverage will be provided by National Credit Guarantee Trustee Company Limited (NCGTC) to eligible MSMEs and interested borrowers of the MUDRA scheme, in the form of a Guaranteed Emergency Credit Line (GECL) facility, the government said.

The tenure of loan under this scheme will be four years with a moratorium period of one year on the principal amount. No guarantee fee will be charged by NCGTC. Interest rates on loans extended by banks and financial institutions will be capped at 9.25%, and 14% for those extended by non-banking financial companies (NBFCs). The scheme would be applicable to all loans sanctioned under GECL till October 31, or till an amount of ₹3 lakh crore is sanctioned, whichever is earlier.

“For this purpose, a corpus of ₹41,600 crore shall be provided by the Government of India, spread over the current and the next three financial years,” the government said.

“All MSME borrower accounts with outstanding credit of up to ₹25 crore as on February 29, 2020, which was less than or equal to 60 days past due as on that date, i.e., regular, SMA 0 and SMA 1 accounts, and with an annual turnover of up to ₹100 crore, would be eligible for GECL funding under the Scheme,” the government said.

Bankers unimpressed

However, bankers said that since the government is not giving a direct guarantee, this may not solve the ‘risk averse’ issue that the lenders are facing.

“It is like the CGTMSE [Credit Guarantee Fund Trust for Micro and Small Enterprises] scheme. The claims will not be settled unconditionally. Questions will be asked… they may like to see the loan appraisal process once a claim is made when the borrower defaults,” an official from a public sector bank said.

Since the scheme is not directly guaranteed by the government, banks still have to attach a risk weight of 20% for the loans. And, if the claim is not settled, banks have to make provision in line with the age of default. Bankers said they may approach the Reserve Bank of India to allow them not to attach any risk weight.

“The government would probably issue a letter of comfort and based on that this corporation will issue guarantees and then when guarantees devolve, that is when banks will make a claim, which is likely in the next two to three financial years; so defaults will happen [over] a period of time. And, the budgetary impact will be spread over a period of time,” the chief executive of a government-owned bank said.

Among other proposals approved by the Cabinet on Wednesday was a subsidy of almost ₹3,110 crore for distribution of extra foodgrains to about eight crore migrant workers and their families.

The Cabinet also approved a new centrally-sponsored scheme to support micro food processing units at an outlay of ₹10,000 crore, the expenditure being shared by the Centre and the States on a 60:40 basis.

The scheme will be implemented over a five-year period and will benefit about two lakh self-help groups, farmer producer organisations and other small units through a credit-linked subsidy, providing money for working capital and tools, a marketing grant, skills training and technical upgrade.

It also approved the Pradhan Mantri Matsya Sampada Yojana, a scheme announced in the 2020 Budget, to develop the fisheries sector over a five-year period.

Of the total investment of ₹20,050 crore, the Centre will spend ₹9,407 crore, the States ₹4,880 crore while beneficiaries themselves will have to invest about ₹5,763 crore. The Cabinet Committee on Economic Affairs also approved the adoption of a new methodology for the auction of coal and lignite blocks on a revenue-sharing basis. The tenure of coking coal linkage was increased to 30 years.

It will also permit commercial exploitation of coal-bed methane in the mining lease area. Rebates in revenue share payments will be given in the event of an early production of coal from the mine. Further rebates will be offered for gasification of coal to encourage environment-friendly actions.

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[sharmaanika388]

The business loans are the loans taken by the entrepreneurs for the business purpose. These loans can be used for any business purpose like – to meet the working capital requirement or for business expansion. Business loans can be availed from both the banks and the NBFCs. The Bhartiya Mahila Bank is one such bank that lends the business loan up to the maximum value of Rs. 20 Crores to the manufacturing enterprises. It offers a loan to the women entrepreneurs at the concessional rate of interest and grants collateral free loan up to Rs. 1 crore under CGTMSE cover. For details regarding rate of interest, tenure and processing fee read the article below –

[coolsneharao-blog]

How small businesses can avail collateral-free loans up to Rs 2 Cr using Credit Guarantee Scheme

The Credit Guarantee Fund Scheme (CGS) for Micro and Small Enterprises (MSE) was launched by the union government in August 2000 to provide collateral-free credit facility to the micro and small enterprise sector. The union ministry of Micro, Small and Medium Enterprises and Small Industries Development Bank of India (SIDBI), established a trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the Credit Guarantee Fund Scheme. The corpus of CGTMSE is being contributed by the union government and SIDBI in the ratio of 4:1 respectively.

The CGTMSE scheme was launched to address the concerns of MSEs for availing timely and adequate credit at reasonable business loan interest rates. A major reason for low fiancé availability to the MSE sector was the high risk perception by financial institutions in extending credit. This resulted in the consequent demand of collateral-based loans, which was not available with the enterprises in this sector. The problem was more acute for first generation entrepreneurs and micro enterprises requiring loans for small business.  

Eligibility for the scheme and credit facilities: All new and existing MSEs, including those in manufacturing and service sector can avail credit facilities up to Rs 2 crore under the scheme. MSEs under the category of retail trade, however, are eligible for a maximum loan of Rs 1 crore. No collateral or third-party guarantee is required for credit facilities under the scheme. You must, however, note that the pre-condition for availing credit facility under the scheme is that the enterprise should not have any existing loan secured either by collateral or third-party.

Additionally, if the MSE—availing loan under the scheme—becomes sick because of reasons beyond the control of the organisation, the lender also provides rehabilitation facilities.

Guarantee Cover: The scheme also provides a guarantee cover to financial institutions—up to a maximum of 85% of the sanctioned amount—in the case of an enterprise defaulting on credit repayment. In cases where the sanctioned amount is between Rs 50 lakh and Rs 1 crore, the scheme provides the lending institution with a uniform guarantee of 50% --with a maximum guarantee cap of Rs 62.50 lakh/Rs 65 lakh-- for the entire sanctioned amount. The guarantee cover under the scheme is for the agreed tenure of the term loan. In case of working capital, the guarantee cover is for five years. This repayment is done against the entire loan amount, including interest for a period of three months, and/or the outstanding loan amount along with its interest calculated from the date of filing the suit, or the day when the loan becomes a non-performing asset, whichever is lower. The guarantee coverage is also provided to Non-Banking Financial Companies (NBFCs), who provide small business loans to the medium, small and micro business enterprises.

Charges for the loans: You have to pay a guarantee fee at the rate of 1.5%. For the North Eastern region, the fee is 0.75%.

How to apply for a loan under CGTMSE?

Be it loans for small business, composite credit facilities or working capital requirements, any MSME can approach the eligible financial institutions for availing credit facilities. The lenders include all scheduled commercial banks and specified regional rural banks. Financial institutions, including some state finance corporations, SIDBI, Export Import Bank of India, National Small Industries Corporation (NSIC) and North Eastern Development Finance Corporation (NEDFI) also among the lenders. The institutions which enter into an agreement with CGTMSE are called Member Lending Institutions (MLIs).

The CGTMSE is using various platforms to increase awareness of the scheme, especially through banks and industry associations. Till March 2018, a total of 30,29,948 accounts have been accorded guarantee approvals for  corpus amount of Rs 1,46,829 crore. So, if you require loans for small business, you can avail easy credit facilities at reasonable business loan interest rates under the scheme.

Conclusion:

CGTMSE is rapidly transforming the credit landscape of the MSME sector. On Finserv MARKETS, you can consider Bajaj Finserv MSME Loan / SME Loans, which are designed to help your growing financial requirements in a timely and easy way. With funds up to Rs 30 lakh as small business loans, you can now easily expand your business or meet the working capital requirements. Along with an attractive business loan interest rate, this small business loan offers a unique Flexi loan facility, and approval in just 24 hours.

[terkar-capital]

CGTMSE – A Driving Force for MSMEs

CGTMSE scheme

All the emerging businesses in India, be it micro, small, or medium are in constant need of finances. Such a need can arise due to several reasons such as expansion, purchase of heavy machinery, payment to creditors, working capital issues, or paying off business dues. But many times due to less knowledge of finance they do not receive proper guidance on the cause. Hence, we at Terkar Capital come into the picture for providing consulting on raising finances. We have a variety of products available in secured funding as well as unsecured funding based on the requirement of the borrower. 

Features of the scheme

1. The initiative was launched to help small businesses grow in a competitive market and assist entrepreneurs to build their businesses and avail of collateral-free loans easily and conveniently.

2. The scheme also aims at strengthening the credit lending facility to developing industries and help them raise funds for the same.

3. Being a collateral-free loan, the process is quite quick and convenient.

4. It has the facility of guarantee cover for their lenders which will cover their loss in case of default by the borrower. The guarantee cover will exist until the total tenure of the loan credit.

5. The guarantee coverage of the scheme ranges from 70-85% in case of non-payment by the borrower.  

6. CGTMSE has a guarantee cover of 50%/75%/80%/85% as per the diverse eligibility criteria.

7. The maximum number of funds availed in this scheme is Rs. 200 Lacs.

8. CGTMSE provides good guarantee covers to North East Region Women Entrepreneurs as well and encourages them to expand their businesses.

The rate of interest may differ as per the market conditions

Procedure for CGTMSE scheme

1. Prepare a project report/ business plan

The crucial step is preparing the project report or a business plan. It has to be submitted to the lending company. Here the lending company will scrutinize whether the company is eligible under the scheme or not.

2. Scrutiny of documents

The lending institution or company will do a thorough investigation of the required documents and proceed with loans.

3. Sanction the loan

The lender will sanction your loan after duly verifying your documents

4. Obtain CGTMSE cover

Once the loan is sanctioned by the bank, the bank will apply to the CGTMSE organization and obtain CGTMSE scheme cover for the loan sanctioned. After obtaining the loan, the customer will have to pay services charges or fees as per the requirement.

Eligibility for CGTMSE (Borrower)

1. The applicant must be categorized as micro and small enterprises.

2. CGTMSE cover is available for Loans to Micro and Small Enterprises (MSE) engaged in manufacturing or service activities.

3. CGTMSE cover is not available for loans to enterprises engaged in retail trade, educational institutions, training centers, self-help groups, and agriculture.

4. The business must have at least 3 years of continuity.

Eligible Lending Institution:

CGTMSE has designated Member Lending Institutions (MLI) which can provide loans to MSMEs. In this list, there are Government Banks, Scheduled Commercial Banks, Regional Rural Banks, NBFCs, Financial Institutions, etc. who have signed an agreement with the CGTMSE ministry.

Why Terkar Capital?

If you are looking for a reliable consultant for raising finance, Terkar Capital can best suit you. It is one of the most modernized and highly specialized finance facilitators in Pune, Mumbai, and India. We understand the borrower's needs, strengths, and weaknesses and work hard to provide professional services. Our timely and professional services make us different from others. Apply for a CGTMSE loan with Terkar Capital.

[bds-legal-services]

Significance of MSMEs in India

Every country’s economic aspirations are stapled on its young, small ventures. The Indian government, with this in mind, provides many advantages to such firms so that they may accomplish development with fewer hassles. To avail of these advantages, the firms that certify must get an MSME or SSI Registration (regulated by the MSMED Act), which is amid the easiest of government registrations to be awarded.

Significance of MSMEs in India

Micro, small and medium enterprises (MSMEs) power India, reckoning for almost 40% of the gross industrial value and 45% of total direct and indirect exports. Hence, the government has initiated various schemes and helps to guarantee the MSME lead a compete free survival in the country, and also distribute, to the Indian Economy. Some of these schemes have been launched by the central government, while others are encouraged by the state government. To avail of them, but, you require a Udyog Aadhar registration.

Benefits of an MSME Registration

Benefits from Banks: All banks and other financial institutions identify MSMEs and have generated special schemes for them. This normally involves priority sector lending, which means that the probability of your venture being permitted a loan is high and lower bank interest rates. There may also be better treatment in case of postpone in a refund.

Tax Benefits: Relying on your venture, you may relish an excise exception scheme as well as exemption from certain direct taxes in the incentive years of your business.

Benefits from State Governments: Most states provide those who’ve filed under the MSMED Act grants on power, taxes, and entry to state-run industrial estates. In specific, there is a sales tax exemption in most states and buy preference on goods produced.

Benefits from Central Government: The the central government, from time to time, intimate schemes to benefit MSMEs, such as the credit guarantee scheme:

Credit Guarantee Scheme (CGTMSE) One of the important competition that the small scale industries encounter is credit and input of income from various sources to guide them.

The Credit Guarantee scheme, introduced to guide MSME, comes with modifications to make it more important for small traders:

The salient schemes of the scheme include: 1. Increasing the optimal eligibility loan from Rs. 25 lakh to Rs. 50 lakh. 2. Lessening the one-time guarantee for loans availed of by the MSME in North-Eastern region of India from 1.5% to 0.75%. 3. Enhancing the extent of guarantee cover from 75% to 80% for: 4. Women functioned Medium and small scale enterprises 5. Micro enterprises, for loans up to 5 lakhs 6. Loans acquired in the North Eastern region of the country 7. Lessening the one-time guarantee fee for all loans availed in North Eastern India from 1.5% to 0.75%.

We, at BDS Legal Services, are MSME Registration Consultants and offer excellent support to our clients in obtaining MSME license.

[rashmio9]

View the simplicity of applying online for a loan from CGTMSE. We provide advice, pointers, and thorough, illustrated instructions for a basic application in our extensive lesson. Get additional information on CGTMSE loan affordability right now.