Circulars/Notifications / Infrastructure, Housing & SME Finance Department  

 IH&SMEFD Circular Letter No. 1
April 13, 2018

The Presidents/Chief Executives,
All Banks/DFIs/Microfinance Banks

Dear Sir / Madam,


Broadening the Scope of Credit Guarantee Scheme (CGS) for Small and Rural Enterprises

Please refer to IH&SMEFD circular No. 1 dated January 13, 2017 and other instructions issued in this regard from time to time.

The scope of CGS is being extended through inclusion of low-end medium enterprises (MEs) as eligible entities for financing under CGS. For facilitating such enterprises under CGS, following criteria shall be followed:

Medium enterprises with annual sales turnover of upto Rs 300 million are eligible.
Maximum financing limit for medium enterprises under CGS is Rs 50 million.
Maximum financing tenor is five years.
Only first time ME borrowers will be eligible under CGS. First time borrowers refer to those MEs which have not already availed any financing facility from any financial institution.
Eligible low-end medium enterprises which do not have the collaterals more than the value of the loan can avail risk coverage of 40% under this facility.
Maximum 20% of the allocated credit guarantee limit can be availed against financing to medium enterprises under CGS. However, this does not restrict Participating Financial Institutions (PFIs) to use entire allocated limit for small, rural and micro enterprises.

Other terms and conditions shall remain unchanged.


Yours sincerely,


(Ghulam Muhammad)


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