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CGTMSE Scheme Operational Guidelines
Ministry of Housing and Urban Affairs (MoHUA), Government of India, had implemented a scheme titled “PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi)”, for facilitating credit to Street Vendors. The scheme has the
- To facilitate working capital loan up to ₹10,000; (On timely or early repayment, the vendors will be eligible for the next loan with an enhanced limit of a maximum of 200% of the earlier loan, subject to a ceiling of ₹20,000)
- To incentivize regular repayment; and
- To reward digital transactions.
The scheme will help formalize the street vendors with the above objectives and will open up new opportunities for this sector to move up the economic ladder.
Small Industries Development Bank of India (SIDBI) will be the Implementation Partner (IP) of MoHUA for scheme administration and would leverage the network of lending Institutions including the SCBs, RRBs, SFBs, Co-operative Banks, NBFCs & MFIs for scheme implementation.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) would be administering the Credit Guarantee Scheme for PM SVANidhi, for the credit facilities sanctioned by the Lending Institutions under “PM SVANidhi”.
The main objective is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed. The other objective is that the lender availing guarantee facility should endeavour to give composite credit to the borrowers so that the borrowers obtain both term loan and working capital facilities from a single agency. The Credit Guarantee Scheme (CGS) seeks to reassure the lender that, in the event of an MSE unit, which availed collateral-free credit facilities, fails to discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the lender up to 50/ 75 / 80/ 85 per cent (as per the current structure) of the credit facility.
Purpose of the Scheme:
To provide guarantee coverage under the Credit Guarantee Scheme for PM SVANidhi to the Member Lending Institutions (MLIs) to facilitate sanction of working capital loan up to ₹10,000 or any amount as per PM SVANidhi. The Scheme has a provision of Graded Guarantee Cover for the loans sanctioned, on a portfolio basis, which is being administered by CGTMSE, as indicated below:
- First Loss Default (Up to 5%): 100%
- Second Loss (beyond 5% up to 15%): 75% of default portfolio
- Maximum guarantee coverage will be 15% of the year portfolio
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