The Union Cabinet on Wednesday approved the introduction of a Credit Guarantee Scheme for Exporters (CGSE) for providing 100% credit guarantee coverage by National Credit Guarantee Trustee Company Ltd (NCGTC) to Member Lending Institutions (MLIs) for additional credit facilities up to ₹20,000 crores to eligible exporters, including MSMEs.The scheme aims to provide 100% guarantee on coverage for the additional credit facility extended to the exporters in need of additional working capital to tide over any short-term mismatches and to explore new potential markets.The government has released the following scheme guidelines for CGSE:
Implementing Agency: National Credit Guarantee Trustee Company (NCGTC)
Date of Commencement: The guidelines shall come into force from the date of issue of the guidelines by NCGTCEligible borrowers include Direct and indirect exporters. Detailed eligibility criteria will be decided by the Management Committee of the Scheme.Quantum of Support for:(i) Direct exporters: Up to 20% of sanctioned export working capital limits
(ii) Indirect exporters: Up to 20% of the working capital limitsMaximum Loan Amount: ₹50 crore per borrowerTenure of Loan: 4 years from the date of first disbursement, including a moratorium of 1 year (i.e 1+3 years)Guarantee Fee: NilCredit Facility: Financial assistance provided under the Scheme by way of additional term loan/working capital term loan facility to borrowersInterest rate: 1% below the interest rate on the existing facility on the date of issue of guidelinesEligible Lending Institutions include:(i) Scheduled Commercial Banks
(ii) Scheduled Urban Co-operative Banks (SUCBs)
(iii) Non-Banking Financial Companies registered with the RBI
(iv) Financial Institutions: As defined in the Reserve Bank of India Act, 1934Security: The MLIs shall ensure to create a charge on existing securities (primary as well as collateral) if any, within a stipulated time. No additional collateral security will be insisted for the scheme.Duration: The Scheme would be applicable from the date of issue of the guidelines by NCGTC up to March 31, 2026, or till guarantees amounting to ₹20,000 crore are issued, whichever is earlier. Detailed operational guidelines of the scheme will be issued by NCGTC with the approval of the management committee.The scheme aims to support liquidity, market diversification, employment, and enhanced global competitiveness for Indian exporters.It will be implemented by the Department of Financial Services (DFS) through the National Credit Guarantee Trustee Company Ltd (NCGTC) to provide additional credit support by MLIs to the eligible exporters, including MSMEs.A management Committee formed under the chairmanship of the Secretary, DFS, will oversee the progress and implementation of the scheme.The government expects the scheme to enhance the global competitiveness of Indian exporters and support diversification into new and emerging markets.The government has described exports as a critical pillar of the Indian economy, accounting for nearly 21% of the GDP in FY 2024-25 and contributing significantly to foreign exchange reserves.Export-oriented industries directly and indirectly employ over 45 million people and MSMEs contribute nearly 45% of total exports.
Source link
