CGTMSE or Credit Guarantee Trust for Micro & Small Enterprise is a Trust, which provide guarantee to lending institutions (such as banks) to lend to Micro & Small Enterprises without Collateral Security.

In simple terms, if you want to avail a loan upto Rs.5 Crores from a Bank for your existing business or a new business, which falls under Micro or Small Enterprise category, you may get it without any collateral security.

However, for availing loan under CGTMSE, you’ll bear certain Fee.

CGTMSE Fee depends on quantum of loan and also differ bank to bank. Following is the Standard Rate of CGTMSE Fee:

Slab	Standard Rate (pa)*
0-10 lakh	0.37
Above 10-50 lakh	0.55
Above 50-1 crore	0.60
Above 1-2 crore	1.20
Above 2-5 crore	1.35
AGF is charged on the guaranteed amount for the first year and on the outstanding amount for the remaining tenure of the credit facility.T The standard rate is applicable across all activity including trading activity.

However, the Trust charge premium or extend discount based on the NPA portfolio of the MLI (Member Lending Institution – for example banks)

MLIs with better portfolio are given the discount of 10% in standard rate whereas MLIs with high risk associated are charged maximum risk premium upto 70% of Standard Rate.

For example for a loan of Rs.1 Crore, Standard Rate is 0.60% pa., if the applicable risk premium is 0.30% for a certain bank (depending upon the NPA portfolio of the particular bank), the fee will be 1.00% pa for the borrower.