Work out the CGTMSE guarantee fee and cover for any MSE loan in seconds and download it as a PDF. Below the calculator: how CGTMSE works under the scheme document updated 1 April 2026, other central and state guarantee schemes, and the PMEGP and CMEGP subsidy schemes explained.
Indicative estimate based on the CGTMSE scheme document (CGS-I) updated 1 April 2026. CGTMSE's demand advice is final. The lender pays the fee to CGTMSE and may recover it from the borrower.
| Year | Fee charged on (₹) | Rate | Fee (₹) | GST (₹) | Total (₹) |
|---|---|---|---|---|---|
| Total |
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was set up by the Government of India and SIDBI. Its scheme has run since 2000. When a bank lends to a micro or small enterprise without collateral or third-party guarantee, CGTMSE guarantees a large part of that loan. If the loan goes bad, CGTMSE pays the bank its share of the loss. That comfort is what lets banks lend to first-generation entrepreneurs who have no property to mortgage.
For the basics of MSMEs, see our MSME notes (Udyam, MUDRA, CGTMSE) and how Udyam registration helps a new business.
| Lender | Maximum credit covered per borrower |
|---|---|
| Public, private and foreign banks; select financial institutions | ₹10 crore |
| Small finance banks, RRBs, state financial corporations, urban, state and district co-operative banks | ₹2 crore |
| Microfinance institutions | ₹50 lakh |
The ₹10 crore cap counts the borrower's outstanding CGTMSE-covered credit, so they can take fresh covered loans as old ones are repaid. Not eligible: loans already guaranteed by NCGTC or another government scheme, facilities with collateral (other than under the hybrid model), and loans to a borrower whose earlier guaranteed loan was claimed and not repaid.
| Category (incl. trading) | Up to ₹5 lakh | Above ₹5 lakh to ₹50 lakh | Above ₹50 lakh to ₹10 crore |
|---|---|---|---|
| Micro enterprises | 85% | 75% | 75% |
| MSEs in the North East (incl. Sikkim), J&K and Ladakh | 80% | 75% | |
| Women entrepreneurs / units promoted by Agniveers | 90% | ||
| SC/ST, persons with disability, transgender entrepreneurs, aspirational-district units, ZED-certified units | 85% | ||
| All other borrowers | 75% | ||
| Slab (total CGTMSE exposure) | Standard rate | 10% discount | +15% RP | +30% RP | +50% RP | +70% RP |
|---|---|---|---|---|---|---|
| Up to ₹10 lakh | 0.37% | 0.33% | 0.43% | 0.48% | 0.56% | 0.63% |
| Above ₹10 lakh – ₹50 lakh | 0.55% | 0.50% | 0.63% | 0.72% | 0.83% | 0.94% |
| Above ₹50 lakh – ₹1 crore | 0.60% | 0.54% | 0.69% | 0.78% | 0.90% | 1.02% |
| Above ₹1 crore – ₹2 crore | 0.85% | 0.77% | 0.98% | 1.11% | 1.28% | 1.45% |
| Above ₹2 crore – ₹5 crore | 1.00% | 0.90% | 1.15% | 1.30% | 1.50% | 1.70% |
| Above ₹5 crore – ₹8 crore | 1.10% | 0.99% | 1.27% | 1.43% | 1.65% | 1.87% |
| Above ₹8 crore – ₹10 crore | 1.20% | 1.08% | 1.38% | 1.56% | 1.80% | 2.04% |
Rates per annum, excluding GST, for guarantees approved or renewed on or after 1 April 2025. RP = risk premium.
If the borrower can offer some collateral, the bank can take it and get CGTMSE cover on the unsecured part only. That part can be up to ₹10 crore. CGTMSE gets a notional second charge on the collateral, with no extra documentation. The fee is lower because it is charged on the outstanding after netting off the collateral value.
Next year, if the principal outstanding is ₹1.8 crore, the fee is charged on ₹1.8 crore − ₹1 crore = ₹0.8 crore. Once the outstanding falls to the collateral value, no fee is charged and the cover closes. Enter a collateral value in the calculator to see this.
A borrower never applies to CGTMSE directly. You apply to a bank, and the bank arranges the cover:
| Rule | Detail |
|---|---|
| Lock-in period | 18 months from last disbursement or guarantee start, whichever is later. 9 months for guarantees up to ₹10 lakh with tenure up to 36 months. |
| Time to invoke | Within 3 years of the NPA date or the end of lock-in, whichever is later. Report the NPA date by the end of the following quarter. |
| Legal action | Recovery proceedings must have started. A SARFAESI recall notice alone is not enough; take a Section 13(4) measure. Waived for outstanding up to ₹10 lakh (claims lodged from 1 April 2023). |
| Settlement | 75% of the guaranteed amount in default within 30 days of a complete claim; the balance 25% after 3 years or once a one-time settlement (OTS) is fully received. For legal-waiver cases, there is also the option of a single instalment at coverage minus 15 percentage points. |
| Not eligible | Accounts classified as fraud, wilful defaulter or non-co-operative; accounts that slip to NPA within 90 days of the material date; losses caused by acting against CGTMSE guidelines. |
| After payment | The lender still recovers from the borrower and passes recoveries to CGTMSE pro-rata, after legal costs. A statutory auditor's certificate is due by 30 September each year. |
Related: NPA classification & provisioning • recovery mechanisms (SARFAESI, DRT, OTS) • charge creation & CERSAI.
Most other central schemes are run by the National Credit Guarantee Trustee Company (NCGTC), a Government of India company that manages several guarantee funds. A loan covered by NCGTC can't also be covered by CGTMSE.
Guarantees micro loans up to ₹20 lakh, including all MUDRA loans (Shishu, Kishore, Tarun and Tarun Plus) given by banks, NBFCs and MFIs. mudra.org.in ↗
For DPIIT-recognised startups. Cover up to ₹20 crore per borrower: 85% of default for loans up to ₹10 crore, 75% above that. The fee is 1% a year for the 27 Champion Sectors. Expanded in May 2025.
60% guarantee on loans up to ₹100 crore for MSMEs buying plant, machinery or equipment, which must be at least 60% of project cost. The March 2026 changes added service-sector MSMEs and a track for exporter MSMEs: 75% cover on loans up to ₹20 crore, with a 2% upfront contribution capped at ₹40 lakh. Other borrowers pay a 5% upfront contribution, now partly refundable if the loan performs.
Approved in November 2025: 100% guarantee on additional credit to eligible exporters, including MSMEs, with ₹20,000 crore in total. Open until 31 March 2026 or until the amount ran out; check with your bank whether it was extended.
Credit guarantee funds back collateral-free education loans (CGFSEL) and skill development loans (CGFSSD, loans up to ₹7.5 lakh with up to 75% cover), so banks can lend to students without security.
Small working-capital loans to street vendors are guaranteed by CGTMSE on a portfolio basis under a separate PM SVANidhi scheme document.
Several states add to CGTMSE: some give their own guarantee or a top-up, some pay or reimburse the CGTMSE fee, and some require CGTMSE cover on loans under their self-employment schemes. A few examples:
Launched in August 2022 with a ₹100 crore fund, in collaboration with CGTMSE, and first offered to MSME borrowers of TIIC and TAICO Bank. 90% guarantee for eligible loans up to ₹40 lakh and 80% above ₹40 lakh up to ₹2 crore.
Since April 2023: collateral-free loans up to ₹5 lakh at 4% interest for residents aged 18–55. CGTMSE cover is topped up by the state, so the lender is covered up to 100%. bccs.wb.gov.in ↗
Interest-free, collateral-free loans up to ₹5 lakh for youth aged 21–40, with a 10% margin-money subsidy. CGTMSE cover is mandatory and the state bears the guarantee fee for 4 years. A second-phase loan up to ₹7.5 lakh has 3 years of fee support.
Reimburses 100% of the CGTMSE fee paid by eligible MSMEs for up to 5 years.
Offers additional interest subsidy and reimbursement of the annual credit guarantee fee, in force until 31 March 2029.
Loans under the Chief Minister's Employment Generation Programme must be covered by CGTMSE, and the state has tied up with CGTMSE for this. See section 11 ↓
State schemes change with each industrial policy, so check your state's MSME or industries department portal (many are listed on myScheme) before applying.
PMEGP is the Ministry of MSME's flagship credit-linked subsidy scheme for starting new micro enterprises. It formed in 2008 from the merger of PMRY and REGP. KVIC is the national nodal agency, and applications are processed by KVIC, the state Khadi & Village Industries Boards and District Industries Centres. The government pays part of the project cost as a margin money subsidy; you contribute a small share and a bank lends the rest.
| Category | Own contribution | Subsidy: urban | Subsidy: rural |
|---|---|---|---|
| General | 10% | 15% | 25% |
| Special: SC/ST, OBC, minorities, women, ex-servicemen, transgender, persons with disability, NER, hill and border areas, aspirational districts | 5% | 25% | 35% |
PMEGP was approved for the 15th Finance Commission cycle (2021-22 to 2025-26) with an outlay of ₹13,554 crore. Applications continue on the KVIC portal; check there for the current year's guidelines before applying.
CMEGP (Mukhyamantri Rojgar Nirmiti Karyakram) is Maharashtra's own PMEGP-style scheme. It was launched in 2019-20 under the state's Industrial Policy 2019 with an aim of about 1 lakh micro and small units and 10 lakh jobs. It is run by the Directorate of Industries through District Industries Centres (urban areas) and the Maharashtra State Khadi & Village Industries Board (rural areas).
| Category | Own contribution | Subsidy: urban | Subsidy: rural |
|---|---|---|---|
| General | 10% | 15% | 25% |
| Special: SC/ST, women, ex-servicemen, persons with disability and other notified groups | 5% | 25% | 35% |
| PMEGP (central) | CMEGP (Maharashtra) | |
|---|---|---|
| Who runs it | Ministry of MSME, through KVIC, KVIBs and DICs | Govt of Maharashtra, through DICs and MSKVIB |
| Where | All of India | Maharashtra residents only |
| Age | 18+ (no upper limit) | 18–45 (+5 years for special categories) |
| Education | Class VIII for manufacturing above ₹10 lakh / services above ₹5 lakh | Class 7 for ₹10–25 lakh; Class 10 above ₹25 lakh |
| Max project cost | ₹50 lakh (manufacturing) / ₹20 lakh (service) | ₹50 lakh (manufacturing) / ₹10 lakh (service, agro, e-vehicle) |
| Subsidy | 15–35% of project cost | 15–35% of project cost |
| Own contribution | 10% general / 5% special | 10% general / 5% special |
| Second loan | Yes, up to ₹1 crore for upgradation | Not in the published scheme details |
| Apply at | PMEGP e-portal ↗ | maha-cmegp.gov.in ↗ |
You can't take a subsidy under both for the same project. Planning your business structure first? See Start a Business in India.
The bank pays CGTMSE, but the scheme allows it to recover the fee from the borrower, and most banks do. Some state schemes, like UP's CM-YUVA, pay it for you; Gujarat and Rajasthan reimburse it under their MSME policies.
Yes. CGTMSE's rates exclude GST, and its fee demands include the applicable GST (18%). The calculator adds it when "Add GST" is ticked.
Yes. Retail and wholesale trade are eligible with the same coverage, ceiling and fee as other activities, for guarantees approved after the 2022 changes.
No. CGTMSE pays the bank part of its loss, but the debt remains yours. The bank continues recovery and passes recoveries back to CGTMSE. A claimed account also stays on your credit record.
CGTMSE charges each lender a risk premium of up to 70% based on its portfolio quality. A newly registered lender pays 70% for at least a year. Ask your bank which category it is in and enter it in the calculator.
Yes. PMEGP gives a subsidy on the project cost, and the bank loan part can be covered under CGTMSE. They complement each other.
CGTMSE figures are from the official scheme document updated 1 April 2026. Other scheme details were checked against the sources below in October 2026. Scheme terms change, so confirm with your bank or the official portal before you rely on them.
Ask in our Discussion forum. This page is general information, not financial advice; scheme terms are set by CGTMSE, NCGTC and the governments concerned.