Guides · MSME
The CGTMSE credit guarantee, explained
CGTMSE is a credit-guarantee scheme that lets micro and small enterprises borrow without pledging collateral, by guaranteeing part of the loan to the lender. It exists to unlock credit for businesses that have the cash flow but not the assets to secure a loan.
What the guarantee does
Under CGTMSE, a share of an eligible loan to a micro or small enterprise is guaranteed to the lender. Because the lender's risk is reduced, it can extend the loan without the usual collateral.
The scheme is aimed at the gap that stops many small businesses borrowing: a viable business that simply has no property or deposits to pledge.
Who it helps
It helps micro and small enterprises that need working capital or a term loan but cannot offer collateral or a third-party guarantee. The loan is applied for through a lending institution, not the trust directly.
Eligibility, coverage, and the fees involved are set by the scheme and change over time, so confirm the current terms with the lender.
How Lekha fits
A lender assessing a loan wants to see clean receivables and payables and a clear net position. Lekha keeps exactly that record current.
Lekha records what your documents say and tracks the money on both sides — what you owe and what you are owed. It records and tracks; it does not replace your accountant.
Questions
- What is CGTMSE?
- A credit-guarantee scheme that lets micro and small enterprises borrow without collateral by guaranteeing part of the loan to the lender, reducing the lender's risk.
- Do I apply to CGTMSE directly?
- No. The loan is applied for through a lending institution, which arranges the guarantee cover under the scheme. Confirm eligibility and terms with the lender.
- Who is CGTMSE for?
- Micro and small enterprises that are viable but lack the collateral or third-party guarantee that a loan would normally require.
This guide is general information, not legal or tax advice. Confirm the current rules and your own circumstances for any specific case.