PRESENTED By:

AKASH GOEL
SHILPI
MANISH KATHURIA
 Micro, Small & Medium Enterprises
New Nomenclature & Classification
(OLD METHOD)
Enterprises
Manufacturing
(Ceiling on investment
in Plant & Machinery)
NEW METHOD OF CATEGORISATION OF
THE MSME
 IT DOESN’T DISTINCT BETWEEN SERVICE AND MANUFACTURING SECTOR
 A MICRO ENTERPRISE WILL BE DEFINED AS A UNIT WHERE THE ANNUAL
TURNOVER DOES NOT EXCEED RS.5 CRORES.
 A SMALL ENTERPRISE WILL BE DEFINED AS A UNIT WHERE THE ANNUAL
TURNOVER IS MORE THAN RS 5 CRORE BUT DOES NOT EXCEED RS 75 CRORE
 A MEDIUM ENTERPRISE WILL BE DEFINED AS A UNIT WHERE THE ANNUAL
TURNOVER IS MORE THAN RS 75 CRORE RUPEES BUT DOES NOT EXCEED RS
250 CRORE
 CAME IN EFFECT FROM FEB 2018
Micro & Small Enterprises -
Importance

 Largest employment generating sector after agriculture

 Employment potential at low capital cost
 Total of 633.88 LAKH registered / unregistered MSEs
 MICRO CONTRIBUTES 99% OF THE TOTAL MSMEs
 URBAN 49% RURAL 51%
 31% MANUFACTURING, TRADE 36%, OTHER SERVICES 33%
 Key contributors to national economy
 40% of total exports
 8% of Gross Domestic Product
EMPLOYEMENT CONTRIBUTION FROM
MSMES
 Challenges faced by SMEs :
 Limited available Capital for SMEs
 Sustaining through initial years
 Difficulties in obtaining Finance from Banks and other lending
institutions
 Requirement of collateral securities
 Requirement of third party guarantee
 CGTMSE - Establishment
 IT WAS SET UP TO LET SMALL INDUSTRIES FLOURISH

 Set up as a Trust in August, 2000 and administered by a Board of

Trustees

 Launched by Ministry of Micro, Small & Medium Enterprise.

 Government of India and Small Industries Development Bank of

India (SIDBI) – Contribution ratio 4 :1

 Initial Corpus – Rs.125 crore ; Present Corpus – Rs.1907 crore ;

Committed Corpus – Rs.2500 crore

 AFTER FEB 2017 GOVT HAS AUGMENTED ADDITIONAL 5000

CRORE MAKING THIS CORPUS UPTO 7500 CRORE
 CGTMSE - Establishment
 Guarantee given to Member Lending Institutions
(MLI)
 For loans sanctioned with out collateral security
and/or third party guarantee.
 Considering the financial requirements of SMEs &
practical hurdles faced by them in raising finance.
 CGT guarantees covers for loans sanctioned to a
maximum amount of Rs.200 lacs including fund and
non fund based finances given by MLI.
 OBJECTIVES OF CREDIT GUARANTEE
FUND TRUST :

 Make available Collateral free Credit facility to SMEs

 To strengthen Credit delivery system
 To facilitate flow of Credit to SMEs
 MLI to give importance for project viability
 Secure credit facility purely on primary security of assets
financed
 MLI should endeavor to give composite credit to the borrowers
 Credit Guarantee Scheme (CGS)
 Operated through Banks / Lending Institutions registered as
Member Lending Institutions (MLIs)
 Scheduled Commercial Banks / select Regional Rural Banks (RRBs) / other
lending institutions as approved by Ministry of MSME eligible to register
as MLIs
 133 ELIGIBLE LENDING INSTITUTIONS ARE REGISTERED AS MLI’S
OF THE TRUST
 LENDERS ASSOCIATED WITH THE
CGTMSE SCHEME
 26 PUBLIC SECTOR BANKS
 21 PRIVATE SECTOR BANKS
 73 REGIONAL RURAL BANKS
 4 FOREIGN BANKS
 DELHI FINANCIAL CORPORATION
 KERALA FINANCIAL CORPORATION
 EXIM BANK OF INDIA
 NEDFI (NORTH EASTERN DEVELOPMENT FINANCE CORPORATION)
 NSIC (NATIONAL SMALL INDUSTRIES CORPORATION)
 Eligible Borrowers
 New and existing Micro and Small Enterprises engaged in
manufacturing or service activity
 Mandatory to have Income tax Permanent Account Number (PAN)
 Additional Credit facilities sanctioned to existing units can be covered
provided no collateral/ third party guarantee is obtained.
 Non Eligible Borrowers

SERVICE ACTIVITY EXCEPT

EDUCATIONAL INSTITUTIONS
SELF HELP GROUPS
TRAINING INSTITUTIONS
EXTENT OF CGTMSE
CGS – Cost of Guarantee
CGS - Benefits

Credit Guarantee Scheme - A tool for

 Widening of credit portfolio

 Better management of risk

 Faster recovery of dues

 Enhancement of profitability
 Operations under CGS
YEAR1,28 NO.OF ACTIVE NO OF AMT OF CUMULATIVE AVERAGE SIZE
MLIS CREDUT GUARANTEES AMOUNT OF (RS. LACS)
FACILITIES APPROVED GURANTEES
APPROVED (RS.CRORE) APPROVED(RS.CR
ORE)

FY2010-11 106 2,54,000 12,589 23,846 4.95

FY2011-12 109 2,43,981 13,784 37,139 5.65
FY2012-13 117 2,88,537 16,062 52,600 5.57
FY2013-14 117 3,48,475 18,188 70,026 5.22
FY2014-15 119 4,03,422 21,275 90,446 5.27
FY2015-16 119 5,13,978 19,949 1,08,991 3.88
FY 2016-17 106 4,52,127 19,931 1,28,787 4.41
 THE STATUS OF GURANTEE APPROVALS TO
TOP FIVE BANKS CUMULATIVELY
 AS ON MARCH 31, 2017

SR.NO MLI PROPOSALS (NOS.) APPROVAL % OF APPROVAL

AMOUNT (IN RS AMT TO TOTAL
LACS) GURANTEE
APPROVED(AMT
WISE)

1 STATE BANK OF INDIA 408,105 19,99,410.97 16

2 CANARA BANK 403,918 12,49,741.02 10

3 BANK OF INDIA 311,867 18,34,875.65 14

4 PUNJAB NATIONAL BANK 256,582 996,899.29 8

5 UNION BANK OF INDIA 150,828 440,548.28 3

 STATE-WISE COVERAGE
 DURING FY 2016-17

SR. NO MLI PROPOSALS(NOS.) APPROVED

AMOUNT(IN RS,
LACS0

1 MAHARASHTRA 52,623 2,83,494.90

2 TAMILNADU 49,000 1,85,823.62

3 UTTAR PRADESH 48,954 1,68,528.05

4 KARNATAKA 46,229 2,27,845.08

5 KERALA 38,194 97,313.01

 OVERALL IMPACT OF CGS
OPERATIONS
AS ON 31.03.2017 AS ON
31.03.2016
CUMULATIVE GUARANTEES APPROVED (IN NOS) 27,72,744 23,23,673
LOAN AMOUNT (EXTENDED BY MLIS)(IN CRORES) 1,28,787 1,08,991
ESTIMATED TURNOVER OF GUARANTEED UNITS (RS CRORE) 10,18,285 8,67,019
ESTIMATED EXPORTS BY GUARANTEED UNITS (RS CRORE) 7,762 7,291
ESTIMATED EMPLOYMENT GENERATION( NOS. LACS) 90.61 77.22
NUMBER OF MLIs 128 127
SC/ST (% TO TOTAL GUARANTEE AMOUNT) 3.86 3.82
WOMEN BENEFICIARY (%TO TOTAL GUARANTEE AMOUNT) 15.66 15.37
MINORITY (%TO TOTAL GUARANTEE AMOUNT) 4.3 4.52
NER(%) 3.75 3.83