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Obtaining financing for Micro, Small, and Medium Enterprises (MSMEs) can often be difficult, particularly when collateral is required. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, backed by the government, helps eligible Micro and Small Enterprises (MSEs) overcome this hurdle by enabling collateral-free credit through participating Member Lending Institutions (MLIs). To take full advantage of this opportunity, it’s essential for businesses to know which banks and financial institutions participate in the CGTMSE scheme and the eligibility requirements needed to secure funding.
This guide provides a comprehensive list of CGTMSE Member Lending Institutions (MLIs), including participating banks, helping MSMEs access the financial support they need for growth and expansion.
Evaluation of eligibility for CGTMSE loans at banks
To qualify for CGTMSE loan coverage, your business must meet the applicable eligibility criteria:
| Eligibility criterion | Requirement |
|---|---|
| Enterprise category | Must be a Micro or Small Enterprise (MSE) eligible under the CGTMSE scheme. |
| Udyam Registration | Must have a valid Udyam Registration Number (URN). |
| Business activity | Must be engaged in an eligible manufacturing, service, or trading activity. |
| Business status | For existing units, the credit facility must meet CGTMSE’s applicable conditions, including being standard and regular and the business activity not having ceased. |
List of banks offering the CGTMSE loans to MSMEs
Note: CGTMSE does not directly provide loans. Eligible Member Lending Institutions (MLIs), including banks, NBFCs, and financial institutions, sanction credit to eligible MSEs and apply to CGTMSE for guarantee coverage.
Public sector banks:
Public sector banks (PSBs) are among the Member Lending Institutions (MLIs) registered with CGTMSE. The current CGTMSE list includes the following PSBs:
- State Bank of India (SBI)
- Bank of Baroda
- Punjab National Bank (PNB)
- Union Bank of India
- Canara Bank
- Bank of India
- Indian Bank
- Central Bank of India
- UCO Bank
- Bank of Maharashtra
- Indian Overseas Bank
- Punjab & Sind Bank
Private banks:
The current CGTMSE MLI list includes 22 private sector banks.
- HDFC Bank
- ICICI Bank
- Axis Bank
- Kotak Mahindra Bank
- Yes Bank
- IndusInd Bank
- Federal Bank
- RBL Bank
- IDFC First Bank
- Bandhan Bank
- Catholic Syrian Bank
- City Union Bank
- DCB Bank
- IDBI Bank
- Karnataka Bank
- Tamilnad Mercantile Bank
- Dhanlaxmi Bank
- Jammu & Kashmir Bank
- Karur Vysya Bank
- Nainital Bank
- South Indian Bank
Foreign banks:
CGTMSE’s current MLI list includes 7 foreign banks.
- Standard Chartered Bank
- HSBC
- Deutsche Bank
- Bank of Bahrain and Kuwait
- Barclays Bank PLC
- DBS Bank
- SBM Bank (India)
Small finance banks:
Small Finance Banks are also represented among CGTMSE’s registered MLIs. The current official list shows 11 SFBs.
- AU Small Finance Bank
- Utkarsh Small Finance Bank
- Jana Small Finance Bank
- Capital Small Finance Bank
- Fincare Small Finance Bank
- Shivalik Small Finance Bank
- Unity Small Finance Bank
- Slice Small Finance Bank
Non-banking Financial Companies (NBFCs):
Examples currently appearing on the official CGTMSE NBFC list include:
- Bajaj Finance Limited
- Tata Capital Limited
- Mahindra & Mahindra Financial Services
- SMFG India Credit Company Limited
- Poonawalla Fincorp Limited
- Northern Arc Capital Limited
- UGRO Capital Limited
- Cholamandalam Investment and Finance Company Limited
- Aditya Birla Capital Limited
- Capri Global Capital Limited
Disclaimer: The list of CGTMSE Member Lending Institutions (MLIs) may change from time to time. Check the latest list on the official CGTMSE website before applying for a loan.
Rural banks:
Regional Rural Banks (RRBs) are eligible to become CGTMSE Member Lending Institutions, subject to CGTMSE’s eligibility criteria. The current CGTMSE directory lists 26 RRBs.
- Regional Rural Banks (RRBs)
- Local Area Banks (LABs)
Co-operative banks:
CGTMSE also covers eligible co-operative banks, including:
- State Cooperative Banks (SCBs)
- Central Cooperative Banks (CCBs)
- District Cooperative Banks (DCBs)
- Primary Agricultural Credit Societies (PACS)
Other financial institutions:
Besides banks, CGTMSE’s MLI framework includes selected financial institutions and Microfinance Institutions (MFIs). The current official list includes institutions such as SIDBI, NSIC, NEDFi, and selected state financial corporations, along with eligible MFIs.
- Selected Financial Institutions
- Microfinance Institutions (MFIs)
- Selected State Financial Corporations
Note: The list we have curated with the help of official website of cgtmse.in
Banks’ interest rates and processing fees (2026)
| Bank Name | Interest Rate* (p.a.) | Processing Fee* |
|---|---|---|
| State Bank of India (SBI) | 7.25% onwards | As per applicable bank guidelines/product. |
| HDFC Bank | Product- and borrower-specific | Up to 1% for certain MSME facilities; varies by product. |
| Bank of Baroda | Product- and borrower-specific | As per applicable bank guidelines/product. |
| Punjab National Bank (PNB) | Product- and borrower-specific | As per applicable bank guidelines/product. |
| ICICI Bank | Product- and borrower-specific | As per applicable bank guidelines/product. |
| Axis Bank | Product- and borrower-specific | Up to 1.25% + applicable taxes. |
| Union Bank of India | Product- and borrower-specific | As per applicable bank guidelines/product. |
| Kotak Mahindra Bank | Product- and borrower-specific | Varies by facility; CGTMSE administrative charges may be up to 0.1% of CGTMSE exposure + applicable taxes. |
| Canara Bank | Product- and borrower-specific | As per applicable bank guidelines/product. |
| Standard Chartered Bank | Product- and borrower-specific | As per applicable bank guidelines/product. |
| IndusInd Bank | Product- and borrower-specific | As per applicable bank guidelines/product. |
SBI’s current CGTMSE page states 7.25% p.a. onwards effective 1 April 2026. Axis currently states processing charges of up to 1.25% + applicable taxes for its CGTMSE facility. Kotak’s current business-loan schedule separately identifies CGTMSE fees and administrative charges, demonstrating why a single “processing fee” figure should not be assumed for every lender.
*Disclaimer: Interest rates and processing fees for CGTMSE-backed credit facilities vary by bank, loan product, borrower profile, credit assessment, loan amount, and applicable bank policies. The figures above are indicative and may change without notice. CGTMSE itself does not set a uniform lending interest rate or processing fee. Verify the latest rate and charges directly with the respective bank before applying. The CGTMSE Annual Guarantee Fee (AGF) is a separate charge from the bank’s interest and processing fee.
CGTMSE bank loan documents & application steps
Applying for a CGTMSE-backed loan involves submitting the required documents to a participating Member Lending Institution (MLI), such as a bank or eligible financial institution. CGTMSE does not directly provide loans to businesses. Instead, the MLI assesses and sanctions the credit facility and then obtains the applicable guarantee cover from CGTMSE. The exact documents and process can vary by lender, loan amount, business structure, and type of credit facility.
Documents required for a CGTMSE loan
Loan application form
The borrower must complete the lender’s loan application form with details about the business, promoters, loan requirement, and proposed use of funds. Providing accurate and complete information can help avoid delays during the lender’s verification process.
Identity and PAN proof
Banks may require PAN along with identity documents such as Aadhaar, passport, or driving licence for the borrower, promoters, partners, or directors, depending on the business structure. CGTMSE requires an IT PAN before the credit facility is availed, subject to the applicable exception for certain loans up to ₹5 lakh.
Address proof
The lender may request documents such as utility bills, rental or lease agreements, passport, or other accepted documents to verify the residential or business address. The specific address-proof requirements can vary between lenders.
Business registration documents
A valid Udyam Registration Number (URN) is required for CGTMSE guarantee coverage. Depending on the nature and structure of the business, the lender may also request GST registration, partnership deed, certificate of incorporation, Memorandum and Articles of Association, shop and establishment registration, licences, or other applicable documents.
Financial statements
Existing businesses may need to provide financial records such as balance sheets, profit and loss statements, and income-tax returns. The number of years of financial statements required depends on the lender, loan amount and business profile, so there is no universal CGTMSE requirement for exactly two or three years.
Bank statements
Banks may request recent business or current-account bank statements to assess cash flows, transaction patterns, and repayment capacity. The statement period varies by lender and should therefore be confirmed when submitting the application.
Business plan or project report
For new businesses, expansion plans or certain term-loan applications, the lender may request a business plan or project report. This typically explains the proposed use of funds, project costs, expected revenues, financial projections, and repayment plan.
Application process for a CGTMSE loan
Approach a CGTMSE Member Lending Institution
The first step is to approach a CGTMSE-registered Member Lending Institution (MLI). The borrower applies to the lender (not directly to CGTMSE) for the required credit facility. The MLI evaluates the application according to its lending policies and applicable CGTMSE guidelines.
Submit the loan application and documents
Submit the completed loan application along with the documents requested by the lender. The bank may verify the business’s Udyam registration, PAN, financial information, business activity, existing liabilities, and other details before proceeding with the credit assessment.
Credit assessment by the lender
The MLI assesses the business’s creditworthiness, financial position, repayment capacity, and viability before deciding whether to sanction the loan. CGTMSE guarantee coverage does not replace the lender’s credit assessment or guarantee loan approval.
Loan sanction and CGTMSE guarantee coverage
If the lender approves the facility, the MLI applies for the applicable CGTMSE guarantee cover through the CGTMSE system. The guarantee is provided to the lender against eligible credit facilities; CGTMSE does not disburse the loan directly to the borrower.
Loan disbursal
After completing the lender’s documentation, sanction, and applicable guarantee formalities, the bank disburses the approved credit facility according to its terms and conditions. Processing times vary between lenders and individual applications, so there is no standard CGTMSE processing period.
Tips for a successful CGTMSE loan application
A strong application can make the lender’s credit assessment smoother. Since CGTMSE guarantee coverage does not guarantee loan approval, focus on demonstrating your business’s repayment capacity, financial health, and clear use of funds.
| Tip | What to do | Why it matters |
|---|---|---|
| Prepare a clear business plan | Explain the purpose of the loan, proposed use of funds, business model, expected revenue, and repayment plan. Include realistic financial projections where required. | Helps the lender assess the viability of the business and purpose of borrowing. |
| Maintain accurate financial records | Keep balance sheets, profit and loss statements, tax returns, invoices, and bank records updated and consistent. | Gives the lender a clearer view of financial performance and repayment capacity. |
| Maintain healthy cash flow | Monitor receivables, payables, working capital, and regular business transactions. Avoid unnecessary cash-flow stress before applying. | Demonstrates the business’s ability to manage operations and service debt. |
| Maintain a good credit history | Pay existing loans, credit cards, and other credit facilities on time. Check your credit report for errors before applying. | Your credit history can form part of the lender’s credit assessment, even when the facility is covered by CGTMSE. |
| Keep Udyam details updated | Ensure your Udyam Registration details are accurate and match the information submitted to the lender. | Udyam Registration Number is required for CGTMSE guarantee coverage under the applicable scheme. |
| Choose the right MLI | Compare eligible banks and other MLIs based on loan products, interest rates, fees, service, and repayment terms. | Different lenders have different lending policies, pricing and documentation requirements. |
| Borrow according to your requirement | Apply for an amount that is supported by your business requirement, projected cash flows, and repayment capacity. | A well-justified loan request can make the credit assessment more straightforward. |
| Clearly explain the use of funds | Specify whether the loan will be used for working capital, equipment, expansion, project costs, or another eligible business purpose. | Helps the lender evaluate the purpose and viability of the proposed credit facility. |
| Keep documents ready | Prepare PAN, Udyam Registration, financial statements, bank statements, GST records, and other documents requested by the lender. | Complete documentation can help reduce avoidable delays in processing. |
| Compare loan terms before accepting | Review the interest rate, processing fee, repayment schedule, applicable CGTMSE charges, tenure, and other terms. | The CGTMSE guarantee does not mean the loan is interest-free or fee-free; lender charges and applicable guarantee fees still need to be considered. |
| Avoid submitting inaccurate information | Ensure turnover, financial figures, liabilities, GST details, and other information are accurate and consistent across documents. | Inaccuracies or discrepancies can complicate the lender’s verification and credit assessment. |
| Understand that approval rests with the lender | Treat CGTMSE coverage as credit guarantee support rather than a loan approval mechanism. | CGTMSE does not directly sanction or disburse loans, and guarantee coverage does not guarantee approval. |
Bottom line: Focus on strong financial records, a realistic loan requirement, good credit discipline, accurate documentation, and a clear repayment plan. These factors can strengthen your application, although the final lending decision remains with the participating MLI.
Conclusion
Choosing the right CGTMSE-backed financing option can help eligible MSEs access business credit while reducing the need for traditional collateral. However, the suitability of a loan depends on factors such as the lender’s terms, funding requirement, business stage, and repayment capacity. Since participating MLIs may have different policies, charges, and assessment criteria, comparing available options is important before making a decision. Businesses should also check the latest CGTMSE guidelines and MLI list to ensure they use current information when applying.
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FAQs
Which banks offer CGTMSE loans in India?
Can I get a CGTMSE loan without collateral?
Who is eligible for a CGTMSE loan?
Does CGTMSE give loans directly to businesses?
What documents are required for a CGTMSE loan?
What is the maximum CGTMSE loan amount?
What is the interest rate for a CGTMSE loan?
There is no single CGTMSE interest rate. The bank or MLI determines the applicable interest rate based on its lending policy, loan product, and borrower profile.
How do I apply for a CGTMSE loan?
Does CGTMSE guarantee loan approval?
Can I check the latest list of CGTMSE banks online?
A product manager with a writer's heart, Anirban leverages his 6 years of experience to empower MSMEs in the business and technology sectors. His time at Tata nexarc honed his skills in crafting informative content tailored to MSME needs. Whether wielding words for business or developing innovative products for both Tata Nexarc and MSMEs, his passion for clear communication and a deep understanding of their challenges shine through.
What is a credit score range we should have to avail the CGTMSE business loan without any issue? and if it is low, then will it impact the interest rate?
Can you please explain if there’s a specific minimum revenue requirement to qualify for a CGTMSE loan?
Yes Abhinav. Some bank officials will surely ask you about ongoing business turnover and growth since last few years.