Manipur Credit Guarantee Scheme with Credit Guarantee Fund Trust for Micro and Small Enterprises

Blog By - Team MyGov,

Manipur MyGov

October 18, 2023

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) setup by M/o MSME, Gol and SIDBI, a pioneer institution for providing credit guarantee to Micro and Small Enterprises (MSEs). It has acted as catalyst in facilitating in financing collateral free loans to the Micro and Small Sectors on pan India basis to boost financial inclusion. The credit Guarantee Scheme facilitates across to finance to un-served and under-served geographies, making the availability of finance from conventional leaders to new-generation entrepreneurs and underprivileged who lack collateral security and/or third-party guarantee to support their loan proposal.

MANIPUR CREDIT GUARANTEE SCHEME (MCGS)

For providing facility of additional guarantee to units located in Manipur, the State Planning Department in collaboration with CGTMSE has taken up a scheme “Manipur Credit Guarantee Scheme (MCGS)” with the objective to increase the guarantee coverage of loans given to MSEs and StartUps in Manipur with collateral free loans. A total of 28,000 additional employments are targeted for generation under this scheme. Loans are provided at different percentage guarantee for loans amounts up to Rs. 2 crore and for Loan amount between Rs. 2 crore and Rs. 5 crore, loan will be provided by the CGTMSE. Also, beneficiaries with good business performance have further opportunity to loan from Banks for upto Rs. 5 crore under CGTMSE and Rs. 6.5 lakh under MCGS.

FOR APPLYING TO THIS SCHEME GO VISIT THE RESPECTIVE BANK GIVEN BELOW HERE AT ANNEXURE-I

SALIENT FEATURE OF MANIPUR CREDIT GUARANTEE SCHEME

All Lending Institutions (Existing Member Lending Institution of CGTMSE including NBFCs) is eligible for coverage under this MCGS.
Micro & Small Enterprises as per MSMED act are eligible to be covered.
Manufacturing, Service sectors, Trading and loans to Educational Institutions are covered.
Credit guarantee is given for MSE loan up to Rs. 200 lakh (on outstanding/ limit basis), which are not backed with collateral and third-party guarantee. Unsecured portion of the Credit facilities with partial collateral security are also eligible for coverage under separate product called ‘Hybrid Security Model’.
Overall guarantee coverage of 100% to be provided. CGTMSE will provide guarantee coverage in the range of 50% – 85% as applicable under its ongoing CGS I Scheme from its own funds and additional 50% – 15% will be guaranteed from the Fund placed by the State Government to cover 100% of the loan amount as disbursed by the lending institutions.
CGTMSE is in the process of enhancing its share in respect of Retail Trade (50%) at par with Normal loans (75-85%).
Assuming and NPA level of 10%, a fund support of Rs. 10 crore from the State Government will support creation of portfolio of about Rs. 700 crore (NPA would be around Rs. 70 crore & assuming the average state government contribution of 15%, Rs. 10 crore funds would be utilized.
Assuming average ticket size of Rs. 5 lakh (at present average ticket size is Rs. 4.31 lakh on cumulative basis) a portfolio of Rs. 700 crore would indicate support to 14,000 MSEs.
Assuming a basis employment rate of 2 per unit, portfolio creation of Rs. 700 crore would mean 28.000 additional employment generation.
The process of guarantee coverage, fee payment, NPA marking, guarantee invocation, claim settlement, recoveries etc. will be as per the existing normal Scheme.

STATE GOVERNMENT CORPUS CONTRIBUTION WILL BE RS. 10 CRORE WHICH IS EXPECTED TO CREATE A PORTFOLIO SIZE OF RS 500 CRORE IN COLLABORATION WITH CGTMSE

Particular	Amount in crore
Portfolio created out of collaboration	10.00
Expected NPA in Portfolio of Rs 10 cr (10%)	1.00
CGTMSE portion of Loss (75%) f the Guarantee	0.75
State Govt Fund portion of Loss (20%) of the Guarantee	0.02
Since Rs. O.02 cr of fund is leading to a creation of Rs. 10 cr of portfolio, a corpus size of Rs. 10 create a portfolio of	500

STATE GOVERNMENT CONTRIBUTION IN RS. 10 CR, WHICH WOULD BE KEPT BY CGTMSE SEPARATELY AS MANIPUR STATE GOVERNMENT CORPUS TO RUN THE SCHEME. THE INTEREST EARNED SHALL BE PLOUGHED BACK TO THE FUND.
ADMINISTRATIVE CHARGES/ MANAGEMENT FEE OF WILL BE CHARGED AT 0.75% P.A OF THE TOTAL CORPUS AMOUNT OR ACTUAL EXPENDITURE INCURRED BY THE TRUST, WHICHEVER IS HIGHER
CGTMSE has received online application of 320 applicants since January 2023 as on 21/08/2023 for loan guarantee of Rs. 20.75 cr and 183 applicants approved for loan guarantee of Rs. 14.13 crore for approval of State Govt Bank wise number of applicants is as given below Annexure I and II consecutively:

Annexure-I

Sl. No.	MLI Names	No of Applications	Total Guarantee Amt (in Rs)	Rs in Lakh	Rs in Lakh
1	BANK OF MAHARASHTRA	3	1160000.00	116.00	116.00
2	INDIAN OVERSEAS BANK	4	3176668.00	31.77	31.77
3	HDFC BANK LIMITED	5	5500000.00	55.00
4	AXIS BANK LIMITED	6	635000.00	6.35
5	PUNJAB & SIND BANK	7	3764320.00	37.64	37.64
6	UCO BANK	8	3004000.00	30.04	30.04
7	UNION BANK OF INDIA	10	1400000.00	14.00	14.00
8	CANARA BANK	11	7042500.00	70.43	70.43
9	CENTRAL BANK OF INDIA	11	4669250.00	46.69	46.69
10	BANK OF INDIA	15	7606500.00	76.07	76.07
11	STATE BANK OF INDIA	18	54138000.00	541.38	541.38
12	BANK OF BARODA	25	5704000.00	57.04	57.04
13	PUNJAB NATIONAL BANK	66	35363717.00	353.64	353.64
14	INDIAN BANK	131	63888005.00	638.88	38.22
	TOTAL	320	207491960.00	2074.92	1412.91

Annexure-II

Sl. No	MLI Names	No of Application	Total Guarantee Amount
1	BANK OF MAHARASHTRA	3	11600000.00
2	INDIAN OVERSEAS BANK	4	3176668.00
3	PUNJBAB & SIND BANK	7	3764320.00
4	UCO BANK	8	3004000.00
5	UNION BANK OF INDIA	10	1400000.00
6	CANARA BANK	11	7042500.00
7	CENTRAL BANK OF INDIA	11	4669250.00
8	BANK OF INDIA	15	7606500.00
9	STATE BANK OF INDIA	18	54138000.00
10	BANK OF BARODA	25	5704000.00
11	PUNJAB NATIONAL BANK	66	35363717.00
12	INDIAN BANK	5	3822000.00
	TOTAL	183	141290955.00