Page 39 - Banking Finance January 2020

ARTICLE

CGTMSE - A

TOOL TO

BOOST MSE

W hen the lending by banks were primarily were many in number and employing huge workforce of the

concentrated towards the amount of
nation aiming to be a well off entrepreneur one day.
collateral available in the proposal, there
were many applicants and aspirants who,
despite having enough experience and The government of India came to the rescue of these
entities and established a trust in collaboration with SIDBI,
expertise in their area of working, were not able to avail in August 2000 and established a trust called Credit
finance from banks only because they were not able to Guarantee Fund Trust for Micro and Small Enterprises
provide any collateral security to the banks and thus were (CGTMSE) which is administered by a board of trustees. Govt
not able to expand their business. Many perished in the stiff of India and SIDBI contributed in the ration of 4:1 to set-up
competitive era as they didn't have financial support to the fund.
expand or further improvise on their products and services
both quantitatively and qualitatively. The finances available Objective:
outside the banking system were too costly for them to avail The broad objective of the establishment of CGTMSE was
and survive.
to:
Y Source of support to 1st generation entrepreneur to set-
Most of these entities were very small enterprises which
up a business and realise there their dreams by making
About the author bank credit available without collateral and 3rd party
guarantee.
Tanweer Ahmad Chowdhary
Y Enable employment generation as the MSME sector
Chief Manager (Faculty) employs largest number people only after agriculture.
Union Bank Of India
Staff Training Centre Y To address growth constraint in MSE sector and facilitate
Mumbai institutional credit flows.

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