👍Interest rate reduction on CGTMSE loans will spur entrepreneurship: Tiruppur Exporters’ Association – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/money-and-banking/interest-rate-reduction-on-cgtmse-loans-will-spur-entrepreneurship-tiruppur-exporters-association/article66683731.ece

Ceiling limit for guarantees has also been enhanced to ₹5 crore from ₹2 crore, earlier

The Centre’s move in reducing interest rates on loans obtained under the Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) will attract more entrepreneurs in the Tiruppur cluster, according to the Tiruppur Exporters’ Association (TEA). 

In the Budget 2023-24, Finance Minister Nirmala Sitharaman announced revamping of CGTMSE with effect from April with an infusion of ₹9,000 crore to the corpus to enable additional collateral-free guaranteed credit to ₹2-lakh crore and reduction in the cost of the credit by about one per cent. 

On Friday the government announced the infusion of ₹8,000 crore into the CGTMSE corpus on March 30. The announcement further said that CGTMSE has issued guidelines reducing annual guarantee fee for loans up to ₹1 crore from a peak rate of 2 per cent per annum to 0.37 per cent.

“This will reduce the overall cost of credit to MSMEs to a great extent,” it added. The ceiling limit for guarantees has also been enhanced to ₹5 crore from ₹2 crore earlier. 

Commenting on these announcements, KM Subramanian, President, TEA said, MSMEs will largely benefit from the reduction of annual guarantee fee for loans up to ₹1 crore. He added that the move will also attract more entrepreneurs in the cluster. 

Subramanian also welcomed stoppage of legal proceedings for settlement of claims of guarantees for loan outstanding up to ₹10-lakh. 

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