Subsequent to the Central Budget announcements during the year 2013-14 to set up various credit guarantee funds, a common trustee company in the name and style of National Credit Guarantee Trustee Company Ltd (NCGTC
) was set up by the Department of Financial Services, Ministry of Finance, Government of India to, inter alia, to act as a common trustee company to manage and operate various credit guarantee trust funds.
NCGTC was incorporated under the Indian Companies Act, 1956 on March 28, 2014 with a paid up capital of ₹10 crore, with its registered office at Swavalamban Bhavan, C-11, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051.
The following Credit Guarantee Trust Funds are under the trusteeship management of NCGTC:
1) Credit Guarantee Fund for Skill Development (CGFSD):
- Guarantees for Skill Development Loans by the member banks of IBA up to ₹ 1.5 lakh extended by lending institutions to eligible borrowers without collateral or third-party guarantee.
2) Credit Guarantee Fund for Education Loans (CGFEL):
- Guarantees for Education Loans by the member banks of IBA up to ₹ 7.5 lakh extended by lending institutions to eligible borrowers without collateral or third-party guarantee.
3) Credit Guarantee Fund for Factoring (CGFF):
- Guarantees for domestic factored debts of MSMEs.
4) Credit Guarantee Fund for Micro Units (CGFMU):
- Guarantees for loans up to the specified limit (currently ₹10 Lakh) sanctioned by Banks / NBFCs / MFIs / other financial intermediaries engaged in providing credit facilities to eligible micro units. Further, Overdraft loan amount of ₹10,000 sanctioned under PMJDY accounts shall also be eligible to be covered under Credit guarantee Fund.
5) Credit Guarantee Fund for Stand Up India (CGFSI):
- Guarantees for credit facilities of over ₹10 lakh & upto ₹100 lakh sanctioned by the eligible lending institutions, under the Stand Up India Scheme (SC/ST/Women for setting up Greenfield enterprises).
6) Emergency Credit Line Guarantee Scheme (ECLGS):
- Launched as a special scheme to enable liquidity support to businesses adversely impacted by lockdown due to COVID 19 pandemic. Provides for 100 % guarantee coverage to Banks & NBFC’s on credit extended to Business Enterprises/MSMEs on their loan outstanding as on February 29, 2020, subject to defined criteria, to meet their additional term loan/additional working capital requirements.
7) Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS):
- To provide guarantee coverage for the funding provided by Scheduled Commercial Banks to eligible projects in the healthcare sector in non-metropolitan areas for setting up of or modernising /expanding (i) hospitals/dispensaries/clinics/medical colleges/pathology labs/diagnostic centres; (ii) facilities for manufacturing of vaccines/oxygen/ventilators/priority medical devices; (iii) public healthcare facilities. The scheme shall provide guarantee cover to both brownfield projects and greenfield projects, subject to a maximum loan of ₹100 crore per project. The guarantee cover provided by NCGTC would be 50% (75% in case of projects coming up in aspirational districts) in case of brownfield projects and 75% in case of greenfield projects.
8) Credit Guarantee Scheme for MFIs:
- To provide guarantee coverage to Scheduled Commercial Banks and AIFIs for the funding provided by them to NBFC-MFIs or MFIs for on lending to eligible small borrowers.
9) Loan Guarantee Scheme for the Covid affected Tourism Service Sector (LGSCATSS):
- To provide guarantee coverage for loans provided by Scheduled Commercial Banks to registered Tourist Guides (recognized/ approved by M/o Tourism and State Govts/ UT Administrations) and Travel & Tourism Stakeholders recognized/ approved by the Ministry of Tourism, Govt. of India, to discharge liabilities and restart their business affected due to Covid -19 pandemic.
10) Credit Guarantee Scheme for Startups (CGSS) :
- The objective of CGSS is to provide guarantee upto a specified limit, against credit instruments, extended by Member Institutions (MIs) to finance eligible Startups. This scheme would help provide the much needed collateral free debt funding to eligible Startups.