Micro Units – where to cover? CGTMSE or CGFMU
Guarantee cover for manufacturing and service Mudra Units is available under CGFMU as well as CGTMSE eligible. So, from where to obtain guarantee cover for such Mudra Units? CGTMSE of CGFMU?
Credit Guarantee Trust for Micro & Small Enterprises (CGTMSE) has issued circular (117/2016-17) regarding modifications due to introduction of Credit Guarantee Scheme under PMMY through NCGTC.
After introduction of CGFMU (Credit Guarantee Fund for Mudra Units), many credit facilities upto Rs.10 lacs, which were eligible for coverage under DGTMSE may now be covered under CGFMU through NCGTC (National Credit) Guarantee Trust Company Ltd.).
To avoid dual guarantee for same credit facility, while applying for CGTMSE coverage (upto Rs.10 lacs to Micro Units), MLIs (Member Lending Institutions) will have to confirm that the facility is not covered under Mudra Guarantee Fund.
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In case of enhancement in working capital facilities exceeding Rs.10 lacs, where guarantee cover for initial credit facility (upto Rs.10 lacs) has been obtained from NCGTC Ltd., MLI can switch to CGTMSE. For switching over to CGTMSE, entire facility (existing + enhanced portion) will be covered under CGTMSE after closing the guarantee cover from NCGTC Ltd. Date of sanction in this case will be the date of enhancement for the purpose of reckoning period for submission of application for coverage under CGTMSE.
In case of any other credit facility is sanctioned to a borrower covered under Mudra Fund, the additional facility may be covered under CGTMSE (if otherwise eligible). For example if a working capital facility of Mr. A of Rs.8 lacs is covered under Mudra Fund and further Term Loan of 5 lacs is sanctioned to same borrower, this term may be covered under CGTMSE.
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