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    Question

    What is the upper limit of the guarantee cover under the

    CGTMSE scheme for micro and small enterprises ?
    A Rs.5 crore Correct Answer Incorrect Answer
    B Rs. 10 crore Correct Answer Incorrect Answer
    C Rs.2.5 crore Correct Answer Incorrect Answer
    D Rs.20 crore Correct Answer Incorrect Answer
    E No limit Correct Answer Incorrect Answer

    Solution

    Under the CGTMSE scheme, the limits were enhanced in the recent Union Budget 2025-26 as follows:  

    • The credit guarantee cover for micro and small enterprises has been increased from ₹ 5 crore to ₹10 crore , enabling additional credit of ₹1.5 lakh crore over five years.  
    • Startups will see their guarantee cover double from ₹10 crore to ₹20 crore, with a reduced fee of 1% for loans in 27 priority sectors.  
    • Exporter MSMEs will benefit from term loans up to ₹20 crore with enhanced guarantee cover  
    The credit facilities which are eligible to be covered under the scheme are both term loans and working capital (fund based/non-fund based), extended without any collateral security or third party guarantee, to a new or existing micro and small enterprise, by lending institutions to a single eligible borrower in MSE sector.  

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