Govt scheme helps MSMEs get easy collateral-free loans

New Delhi

The Ministry of Micro, Small & Medium Enterprises (MSME) is pushing the Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE) to help first-time entrepreneurs and create more self-employment opportunities.

The scheme provides important credit support to small businesses, allowing them to get loans without giving any property or third-party guarantees as security. Under CGTMSE, businesses can get loans up to Rs 10 crore. The government covers 75% to 90% of the loan amount, depending on the business’s risk profile and other factors.

All Micro and Small Enterprises (MSEs) can apply for this scheme, including both new and existing businesses. To get these loans, businesses need to approach partner banks and Non-Banking Financial Companies (NBFCs) that are part of the CGTMSE network.

India has about 26 million MSEs, providing jobs to around 60 million people. This scheme aims to help these businesses grow easily by giving them access to much-needed money without the stress of offering collateral.

The CGTMSE scheme started on January 1, 2000, and was officially launched on August 30, 2000. The fund is supported by the government and SIDBI in a 4:1 ratio. As of July 1, 2025, loans worth Rs 10,26,145 crore have been approved under the scheme, covering over 1.2 crore guarantees.

Maharashtra leads in total loans approved at Rs 1,26,521 crore, followed by Uttar Pradesh at Rs 1,04,856 crore, and Gujarat at Rs 85,160 crore.

This scheme supports first-time business owners in starting and expanding their businesses, helping build a strong and self-reliant India by empowering small entrepreneurs across the country.