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    Question

    Under the Credit Guarantee Scheme for Micro and Small

    Enterprises (CGTMSE), what is the guarantee cover tenure for working capital facilities?
    A 2 years or a block of 2 years Correct Answer Incorrect Answer
    B 3 years or a block of 3 years Correct Answer Incorrect Answer
    C 5 years or a block of 5 years Correct Answer Incorrect Answer
    D 10 years or a block of 5 years Correct Answer Incorrect Answer
    E Till the business remains operational Correct Answer Incorrect Answer

    Solution

    The Credit Guarantee Scheme makes a distinction between term loans/composite credit and working capital facilities. • For term loans, the guarantee cover is provided for the full agreed duration of the loan. • For working capital facilities, the guarantee cover is fixed at 5 years or in blocks of 5 years. This structured tenure helps balance risk exposure for the Credit Guarantee Trust and also provides adequate support for enterprises during their stabilization and growth phase.

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