CGSSD — Credit Guarantee Scheme for Subordinate Debt — Frequently Asked Questions
Answers to the questions founders most often ask about CGSSD — Credit Guarantee Scheme for Subordinate Debt — who qualifies, the funding amount, required documents and how the application works.
Frequently asked questions
What is the CGSSD scheme?
The Credit Guarantee Scheme for Subordinate Debt (CGSSD) helps promoters of stressed or NPA-classified MSMEs infuse subordinate debt (quasi-equity) into their companies to revive operations. CGTMSE provides a 90% guarantee on the subordinate debt.
Who can apply for CGSSD?
Promoters of MSMEs whose accounts are classified as stressed or Non-Performing Asset (NPA) by a bank, provided the MSME has a viable revival plan. There are no restrictions on industry or state.
How much funding can I get through this scheme?
The amount is not fixed publicly; it is determined by the revival plan and the bank's assessment. The promoter contributes 10% of the debt, and CGTMSE guarantees the remaining 90%.
Is this a grant or a loan? Does the government take equity?
It is a loan, not a grant, and must be repaid. The government does not take any equity in your company. The support is a guaranteed subordinate debt that the promoter infuses as quasi-equity.
What is the application deadline?
The scheme has a rolling deadline — applications are accepted on an ongoing basis through CGTMSE's member lending institutions.
Do I need DPIIT or MSME registration?
The scheme does not explicitly require DPIIT or MSME registration, but your MSME must be classified as stressed or NPA by a bank, which implies it is a registered MSME.
What documents are needed to apply?
You will need to provide a viable revival plan, financial statements showing the NPA/stressed status, and other documents as required by the lending institution. Specifics depend on the bank.
How do I apply for CGSSD?
Approach any CGTMSE member lending institution (scheduled commercial bank) with your revival proposal. You can find the list of eligible lenders and detailed guidelines on www.cgtmse.in.
What happens after the revival?
Once the MSME revives successfully, it can return to normal banking relationships and access regular credit facilities. The subordinate debt must be repaid as per the agreed terms.
Is there any fee for the guarantee?
The scheme does not mention any fee in the provided information. Typically, CGTMSE charges an annual guarantee fee, but details should be confirmed with the lending institution.
Who offers CGSSD — Credit Guarantee Scheme for Subordinate Debt?
CGSSD — Credit Guarantee Scheme for Subordinate Debt is offered by Ministry of MSME, a government body. It is provided as non-dilutive funding.
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