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MSME sector in State benefited by credit guarantee fund trust

 The Micro, Small and Medium Enterprises (MSME) sector in Odisha has been greatly benefitted due to Credit Guarantee Fund Trust for MSMEs(CGTMSE), said Surendra Nath Tripathy, Development Commissioner, Union MSME department.

Tripathy said entrepreneurs were extended credit support without collateral under this program and it has turned out to be a great success during last three years across the country.  Tripathy, while reviewing the progress of the flagship program of the Ministry of MSME here today said that, 52,855 enterprises in Odisha have reaped benefit under the CGTMSE program with a loan of Rs.2,289 crore during 2014-17.

During 2004-14, at least 32,884 MSMEs took credit of Rs 1,336 crore to tide over their liquidity problem in the State.  The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), set up in 2000, was part of the government’s credit guarantee scheme to enhance credit to the MSME sector.

The trust was set up in association with the Small Industries Development Bank of India (SIDBI) and guarantees loans up to Rs.2 crore.  Guarantees offered by the Trust allow small and medium enterprises to borrow at cheaper rates, said the official.

Though CGTMSE program was launched in 2000, its progress was not upto expectations. But, the Ministry of MSME gave the required boost from 2014 and the program has yielded much better results. During 2000-2014, as many as 14, 37, 370 entrepreneurs were provided collateral free credit, while during 2014-17, 13, 69, 527 entrepreneurs have reaped the benefit.

While Rs 72,399 crore of credit was provided during 2000-2014, during 2014-17, Rs 61,116 crore of collateral free credit has been provided, said sources in MSME Ministry.   In order to provide fillip to the small entrepreneurs and ensure job creation, the Union government on December 31, 2016 doubled the credit guarantee limit for Micro Small and Medium businesses to Rs 2 crore to help them tide over liquidity problems.

Prime Minister Narendra Modi, while addressing the Nation on the eve of New Year had made this announcement.

The government underwrites loans given by banks to small businesses through a trust. So far, loans were covered up to Rs one crore. This limit was enhanced to Rs two crore. Earlier, the scheme only covered bank loans but from January 1 this year, CGTMSE program is also covering loans given by Non Banking Financial Companies (NBFC)s, said Tripathy.

Inclusion of NBFCs under the CGTMSE has also helped the MSME entrepreneurs in a big way. Now more NBFCs are signing MoU with the MoMSME and Guarantee Covers are being hiked for the NBFCs, said sources. CGTMSE Corpus has been enhanced by Rs 5000 crore, so that more entrepreneurs are able to receive coverage of collateral free credit, said sources.

Since inception, a total of 2, 80, 68,917 entrepreneurs have covered through CGTMSE with credit amount of Rs 1,35,516 crore.  


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