CREDIT GUARANTEE SCHEME FOR MICRO, SMALL ENTERPRISES

State Bank of India has signed a memorandum of understanding with the Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) under which the risk of providing collateral-free credit facilities to micro and small enterprises will be shared between the two. For all collateral-
free loans between Rs. 50 lakh to Rs. 1 crore given by SBI to micro and small enterprises, CGTMSE will provide a 50 per cent guarantee cover and the balance 50 per cent risk will be borne by SBI. The guarantee fee and annual service fee charges under this scheme will be 0.75 per cent and 0.375 per cent respectively.