ENA MSME 2017-02-02 10:34:45 <p><strong>New Delhi, Feb 2 (KNN)</strong> The recent decision of the Government to enhance the corpus fund of CGTMSE to Rs 7500 crore addressed a long awaiting demand of the MSME sector.</p> <p>The Ministry of MSME has allocated Rs 2000 crore to the Trust in budget 2106-17 and now Rs 3000 crore in the current budget.</p> <p>However, the website of the Trust is silent on the issue; it has not even mentioned the enhancement in the loans coverage limit to Rs 2 crore!!</p> <p>On the eve of the New Year Prime Minister Modi had announced the hike in the coverage of loans from Rs 1 crore to Rs 2 crore.</p> <p>CGTMSE was constituted by the Vajpayee Government to address the collateral barriers in Bank loan to micro and small enterprises.</p> <p>Under the credit guarantee scheme operated by the trust, Bank loans to MSEs are guaranteed for repayment, even if the borrower fails.</p> <p>This also eliminates providing of collaterals by the MSE borrower, often they cannot offer due to limited resources.</p> <p>The guarantee facilitated release of Bank loan to the small rather, micro enterprises.</p> <p>As on May 31, 2016, a total of 24.31 lakh proposals from micro and small enterprises have been approved for guarantee cover for aggregate credit of Rs 1.13 lakh crore.</p> <p>However, of late the growth in the guarantee offered has slowed down as the fund became highly leveraged.</p> <p>It had a corpus of only Rs 2500 crore to cover the Rs. 1 lakh crore plus loans it had underwritten.</p> <p>Governments decision to enhance the corpus and immediate provision of Rs 5000 crore additional corpus will resurge the credit coverage by the Trust. <strong>(KNN/ DB) </strong></p> 16372 http://knnindia.co.in/news/newsdetails/msme/recapitalisation-of-credit-guarantee-trust-for-micro-and-small-enterprises-cgtmse-a-step-in-right-direction 2017-02-02 10:34:45 knnindia.co.in