Question
The Credit Guarantee Fund Trust for Micro and Small
Enterprises (CGTMSE) was established jointly by the Government of India (through the Ministry of MSME) and which institution?Solution
• The CGTMSE scheme was launched in 2000 by the Ministry of Micro, Small and Medium Enterprises (MSME), Government of India, in collaboration with SIDBI. • Its primary objective is to encourage collateral-free loans to Micro and Small Enterprises (MSEs). • Under the scheme, banks and financial institutions receive a credit guarantee cover (up to a specified percentage) in case the borrower defaults. • This reduces the lender’s risk and motivates them to extend loans to first-time or small entrepreneurs. Thus, the partner institution is SIDBI.
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