The Hindu Business Line : Collateral-free loans for micro, small units

Bangalore, Oct.17 Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has announced the launch of an experimental collateral-free loans through its member banks for loans banks up to Rs one crore.

CGTMSE under its regular scheme provided credit guarantee of 75 per cent for loans upto Rs 50 lakh . Higher coverage of 80 per cent was given to credit facilities upto Rs Five lakh to micro entrepreneurs, women entrepreneurs and units located in the North-East Region.

Briefing media persons after signing a Memorandum of Understanding with Canara Bank here, Mr O.S. Vinod, Chief Executive Officer of CGTMSE, said the Trust has earmarked Rs 25 crore for implementing the new scheme of Risk Sharing Facility providing 50 per cent of the risk guarantee. The remaining 50 per cent will be borne by the member banks, including Punjab National Bank, Small Industries Development Bank of India, Bank of India, United Bank of India and Union Bank of India. The Risk Sharing Facility is part of the World Bank line credit of $ Five million obtained by SIDBI.

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