Latest news with #CGTMSE
The Hindu
2 days ago
- Business
- The Hindu
CITI calls for suggestions from MSME textile units on measures to alleviate the financial stress they face
The Confederation of Indian Textile Industry (CITI) has sought suggestions from the textile industry, especially those in the Micro, Small and Medium-scale (MSME) segment, on measures required to reduce the financial stress the units face. The Ministry of Textiles has done a detailed study on the credit access issues of the textile sector and the Textiles Secretary recently held a roundtable discussion on 'Credit Access Issues in the Textile Sector' to explore the potential solutions in consultation with industry, financial and policy institutions. It was pointed out at the meeting that the working capital needs for the textile industry are not captured well by the banks. The bank should understand better the long payment cycle, job work requirement, etc., and the other nuances of the textile industry and ensure that the industry has better access to bank credit. The risk perception in the textile industry is said to be another major deterrent, given the present rating systems, which are not textile centric. The Secretary sought suggestions from the stakeholders for a textile specific credit rating protocol. There are separate funds for various financing needs for sustainable production, like the energy efficiency fund, the water management fund, etc. There should be a consolidated 'Green Fund' for such investments in the textile sector. The stakeholders suggested that there should be a mechanism to monitor and ensure the industry has access to the Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) system. The industry reported problems in accessing and low utilisation of the fund. There should also be cluster-level credit facilitation centres. The industry can submit more suggestions so that the MSME units have better access to funds, the Confederation said.
New Indian Express
5 days ago
- Politics
- New Indian Express
Implement welfare schemes effectively: NCSC
GUNTUR: National Commission for Scheduled Castes (NCSC) member Vaddepalli Ramachander on Monday directed officials to strictly implement all welfare and development schemes meant for Scheduled Castes (SCs) in line with constitutional provisions. Chairing a review meeting at SR Sankaran Hall in the Guntur Collectorate, he stressed the constitutional mandate under Article 338, which grants the NCSC quasi-judicial powers to safeguard SC rights. He warned that officials failing to adhere to guidelines could face suspension or legal action. Commending Guntur district's improved SC student pass rates, he urged banks to expedite housing loans under PM Awas Yojana and asked private schools not to harass SC students over fee reimbursements. On atrocities, Ramachander directed police to file charge sheets promptly, avoid counter-cases, and ensure swift delivery of compensation, jobs, and rehabilitation. He called for timely loans under PMEGP and Stand-Up India, citing the Rs 1,000 crore CGTMSE fund for collateral-free loans. He insisted backlog posts and reservation-based promotions be implemented. 'RESPOND TO COMPLAINTS FILED UNDER SC/ST ACT' Vijayawada: Vaddepalli Ramachandar, Member of the NCSC, has directed officials to respond promptly to complaints filed under the SC/ST Atrocities Act. Speaking at a review meeting in Vijayawada on Monday, he stressed the need to register FIRs immediately upon receiving complaints and to initiate swift action, including arrests. He also instructed that District Vigilance and Monitoring Committee meetings be held every three months
Business Standard
09-07-2025
- Business
- Business Standard
How to get a ₹5 Lakh Business Loan in India?
A ₹5 Lakhs business loan offers small enterprises essential capital for growth and operations. Many entrepreneurs choose this amount to balance needs and affordability. You can apply for a business loan digitally. Lenders such as Bajaj Finance Limited and IIFL Finance offer fast disbursals and flexible terms. Why Choose a ₹5 Lakh Loan A ₹5 Lakh business loan strikes a practical balance for many small entrepreneurs. This amount often covers immediate needs without overburdening repayment. Read on. Ideal scale for growth ₹ 5 Lakhs is substantial enough for working capital, inventory, or equipment. IIFL Finance notes financing this amount supports market expansion and machinery purchase. Affordable repayment Loan terms often span 36 months, easing monthly EMI stress. Flexible tenures adapt to cash flow cycles. Collateral-free options Many ₹5 Lakhs business loans require no collateral under CGTMSE or Mudra schemes. This removes barriers for those without major assets. Competitive interest rates Lenders offer rates from mid-teens to mid-20s, depending on credit score and lender. These rates are manageable with stable cash flow. Types of ₹5 Lakh Business Loans Lenders offer various options tailored to different business needs. You can apply for a business loan that suits your repayment capacity and funding purpose. Unsecured Business Loans These do not require any collateral. Lenders assess your credit score, income, and business performance before approval. Secured Business Loans You must pledge an asset such as property, machinery, or stock. This reduces interest rates and improves approval chances. Working Capital Loans Designed to cover daily expenses such as salaries, rent, and vendor payments. These help maintain business continuity during lean periods. Term Loans These are disbursed in full and repaid in monthly instalments. Ideal for planned business expansion or large purchases. Eligibility Criteria Before you apply for a business loan, check if you meet the standard eligibility criteria. While requirements vary, most lenders follow a similar checklist. Age of Applicant You must be at least 21 years old to apply for a loan application. Most lenders set an upper age limit of 65 years at loan maturity. Business Vintage Your business must be operational for at least one to three years. Established businesses with steady revenue have better approval odds. Annual Turnover Lenders typically expect a minimum turnover of ₹10 Lakhs to ₹15 Lakhs. Higher turnover may lead to lower interest rates. Credit Score A CIBIL score of 685 or more is preferred. A score above 700 significantly boosts your chances of securing a ₹5 Lakh business loan. Business Type and Registration Proprietorships, partnerships, LLPs, and private limited companies are eligible. The business must be registered with the appropriate authority. Location and Nationality You must be an Indian citizen and resident. Some lenders may exclude certain areas from their serviceable locations. Documents Required Submitting the correct documents is vital when you apply for a business loan. It ensures faster verification and speeds up the disbursal process. Identity Proof Valid documents include PAN card, Aadhaar card, voter ID, or passport. Address Proof Accepted documents include utility bills, passport, rent agreement, or Aadhaar card. Business Registration Proof This may include the Shops and Establishments Act licence, GST registration, or company incorporation certificate. Financial Documents These include bank statements for the past 6 to 12 months, income tax returns for the last 2 years, and profit & loss statements. GST Returns Most lenders ask for GST return filings for the past 12 months to assess your business performance. Step-by-Step Application Guide Follow these steps to improve your chances of timely approval. 1. Assess Your Needs Define why you need the loan—working capital, expansion, or equipment. 2. Research Lenders Compare banks, NBFCs, and online marketplaces like %$$BrandName$$% and IIFL. Evaluate interest rates, processing fees, and documentation requirements. 3. Check Eligibility Use online eligibility tools or check lender-specific criteria. Ensure your credit score and turnover meet the basic requirements for the business loan. 4. Collect Required Documents Prepare all necessary paperwork, including identity proof, business registration, financial records, and bank statements. 5. Fill Out the Application Form Complete the form either online or offline. Provide accurate business details, loan amount, and repayment tenure preference. 6. Upload or Submit Documents Attach scanned copies if applying online. For offline applications, ensure self-attested hard copies are properly arranged. 7. Verification and Approval The lender reviews your documents and may conduct a personal discussion or business visit. Upon successful verification, the loan is approved. 8. Disbursal of Funds Once approved, the loan amount is credited to your account, usually within 24 to 72 hours depending on the lender. A business loan of ₹5 Lakhs can be the financial push your enterprise needs to scale or stabilise. With digital platforms, applying is now easier than ever.
India Gazette
07-07-2025
- Business
- India Gazette
Govt. promotes Credit Guarantee Scheme for MSMEs to empower first-generation entrepreneurs with collateral-free loans
ANI 07 Jul 2025, 16:34 GMT+10 New Delhi [India], July 7 (ANI): The Ministry of Micro, Small & Medium Enterprises (MSME), Government of India, is actively promoting the Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE) to empower first-generation entrepreneurs and foster self-employment opportunities. According to the Ministry of MSME, this initiative provides vital credit guarantee support to MSMEs for collateral-free loans, enabling Micro and Small Enterprises (MSEs) to access financial assistance without the need for traditional collateral or third-party guarantees. Under the CGTMSE, eligible businesses can secure loans of up to Rs 10 crore, with the extent of guarantee coverage ranging from 75 per cent to 90 per cent, depending on the profile and risk assessment of the scheme applies to all Micro and Small Enterprises (MSEs).Applicants can avail of this benefit by approaching Member Lending Institutions, including banks and Non-Banking Financial Companies (NBFCs), that are partnered with the CGTMSE framework. According to the ministry, there are an estimated 26 million micro and small enterprises (MSEs) in the country providing employment to an estimated 60 million this scheme, both the existing and the new enterprises are eligible for credit-free loans under the scheme was formally launched on August 30, 2000 and is operational with effect from 1st January 2000. The corpus of CGTMSE is being contributed by the Government and SIDBI in the ratio of 4:1, respectively. As of July 1, 2025, loans of Rs 10,26,145 crore have been approved under the scheme against over 1.2 crore guarantees. Maximum loan under the scheme is approved for Maharashtra of Rs 1,26,521 crore, Uttar Pradesh at number two at Rs 1,04,856 crore, followed by Gujarat with a loan approval under the scheme at Rs 85,160 crore. (ANI)
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Business Standard
01-06-2025
- Business
- Business Standard
Signs bright for MSME sector as lending and financial stability improve
The TransUnion CIBIL and SIDBI MSME Pulse report for May has it that in FY25 credit to the sector stood at ₹35.2 trillion, up 13 per cent year-on-year. The quality of the book also improved: overall balance-level delinquencies (measured as 90-720 days-past-due, a reference to cases where the account is not current and classified as sub-standard) was at its lowest level in the last five years at 1.79 per cent, an improvement of 35 basis points. This last aspect must be read along with the support extended under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to motivate lenders to step up lending, albeit with proper underwriting and credit-monitoring mechanisms. In FY25, there were more than 2.7 million beneficiaries with guarantees extended at ₹3.06 trillion, a growth of 51 per cent over the previous financial year — the highest in CGTMSE's history. The stronger scaffolding — both by way of fiscal support and government policy initiatives — is being hooked into by players to step up their game. On the ride Take Bank of Baroda (BoB): it has set up more than 350 specialised MSME branches with experienced relationship managers, product specialists and service teams; these branches are well positioned to strengthen delivery across the bank's network. 'These are in high-potential pin codes and strategically mapped to the branch network to ensure greater reach, sharper service delivery, and stronger last-mile credit access,' says Beena Vaheed, BoB's executive director (ED). Take another initiative which is paying off big time: TreDS, short for Trade Receivables Discounting System, an online platform that enables MSMEs to access working capital by discounting their invoices to financiers, primarily through an auction mechanism. TReDS has grown to over ₹2,33,000 crore in FY25 from around ₹950 crore in FY18, notes an impact study by the Receivables Exchange of India (RXIL) in partnership with the Indian Institute of Management Bangalore (IIM Bangalore). The presence of multiple financiers and the auctioning mechanism has reduced the interest burden (on buyers and sellers) on the platform. There has also been a considerable improvement in the participation of MSMEs with women entrepreneurs or senior women executives, with their share increasing to 7,406 companies (40 per cent) from 14 firms (10 per cent) during FY18-24. Can TReDS be fine-tuned? As Ketan Gaikwad of RXIL sees it, integration with other digital infrastructure such as government e-marketplace, Goods and Services Tax (GST) network, e-invoicing, and the account aggregator framework can further streamline processes, reduce fraud, and lower transaction costs. 'Regulatory support to encourage mandatory participation of large buyers and government enterprises, and perhaps even incentive schemes for timely payments can significantly boost the ecosystem's health and ensure MSMEs receive their dues efficiently,' says the managing director (MD) and chief executive officer (CEO) of RXIL. There are pain points in TReDs though. A significant share of registered participants is not active and has no processed transactions, suggesting a need to identify the potential causes behind their inactivity. Most MSMEs cited a breakdown in their trading relationships either due to pausing sales to buyers or their buyers becoming insolvent as the main cause for inactivity. A few MSMEs also mentioned that they were engaging in direct transactions with buyers, benefiting from a faster payment period of 15-20 days. A case is now being made to extend the Credit Guarantee Fund Scheme for Factoring under National Credit Guarantee Trustee Company Limited to cover invoices. Doing so would enable factoring companies and banks to accept bills drawn on smaller or lower-rated buyers, facilitating greater inclusion. Over time, as transaction histories develop, the need for guarantees may diminish, allowing financiers to rely on established credit records. Formal business Finance apart, what's missed in the MSME plot is the importance of formalisation. This was highlighted by J Swaminathan, deputy governor of the Reserve Bank of India (RBI), on November 16 last year. He said many MSMEs operate informally, 'making it challenging for lenders to assess their creditworthiness due to information asymmetry, particularly regarding their financial performance.' Swaminathan was speaking at the CEO forum of the Federation of Telangana Chambers of Commerce and Industry in Hyderabad. He was for MSMEs registering on the Udyam Portal and filing GST returns. That will enhance their credibility and may qualify them for priority sector lending and government schemes, by reinforcing their trustworthiness in the eyes of financial institutions. Record keeping is another blind spot. 'Having financial statements prepared by certified professionals and audited by qualified auditors shall further bolster their credibility,' he said. This becomes critical as lenders also have to answer central bank inspectors if it is found they have been 'accommodative of MSMEs' with less than adequate financial records — well intentioned though it may have been to help tide over a tight situation. Bhavesh Jain, MD and CEO of TransUnion CIBIL, feels it is imperative that MSMEs receive assistance in accessing formal credit and guidance in debt management. Additionally, fluctuations in the business cycle affect these enterprises disproportionately, as they often lack the financial reserves or support necessary to navigate adverse conditions. 'Therefore, it is crucial to extend support to this sector and equip it with tools for effective financial management.' That said, MSMEs must also step up: it's a touchy area but the trade knows these issues cannot be ducked. 'Long way to go' 'My recent interactions with a cross section of MSMEs have brought out three clear areas where they have a long way to go: corporate governance, including data integrity; poor understanding of cross-border trade; and digital transformation,' notes Ravindra Kumar, advisory board member of SME Chamber of India. These seriously hamper MSMEs' creditworthiness, be it while raising loans or tapping capital. There is reluctance in hiring a professional chief financial officer (CFO) even in cases of larger mid-market companies. They would rather still depend on either virtual part-time CFOs or chartered accountancy firms. The larger SMEs have to get on board high-quality independent directors (IDs). The fight to onboard IDs is increasingly becoming tough across India Inc. 'A large section of MSMEs is now exposed to cross-border exposures either through imports or exports, but there is a fair lack of understanding as to how to finance international trade, manage cross-nation tariff and payment and currency risks,' says Kumar. The problem accentuates due to their lending partners being mostly local banks unable to provide the necessary expertise and hand holding. These companies must engage advisors who have international banking and trade financing experience. This fault-line is set to deepen and broaden with the global tariffs issue. Then you have the transition to digital. 'There's a need to push for adoption of a digital marketplace to serve the MSME segment — both from the supply and demand sides. This will help MSMEs to optimise their cost of production and at the same time bring about better demand discoverability to expand access to newer markets,' notes Rohan Lakhaiyar, partner at Grant Thornton Bharat. While the government is playing a role through MSME Mart, there's a compelling business case for digital startups to enter this niche and facilitate growth of MSME profitably. The RXIL-IIM Bangalore study touches upon this aspect: TReDS should partner with industry bodies and local associations to conduct workshops and webinars to educate MSMEs on the importance of working capital management and the benefits of the platform. It should advocate for government initiatives aimed at improving digital capabilities among MSME entrepreneurs.
