The Federation Chamber of Industries Kashmir (FCIK) in association with Small Industries Development Bank of India (SIDBI) and J & K Bank is organizing an awareness programme to disseminate all relevant information about the features and implementation of ‘Credit Guarantee Fund Scheme’ which provide an opportunity for the new and existing micro and small scale industrial entrepreneurs to avail loan facilities upto Rs 50 lakhs without any collateral security or third party guarantee. Giving details of the programme, the President FCIK, Shakeel Qalander said “Not many entrepreneurs in the state know that Ministry of Micro, Small and Medium Enterprises and Small Industries Development Bank of India have jointly set up Credit Guarantee Fund Trust for Small Industries (CGTSI).

The fund guarantees upto 75% of the credit risk of the loans of the lending banks and institutions in favour of the micro and small industrial units including industrial related service units subject to a loan cap of Rs 50 lakhs and guarantee cap of Rs 37.50 lakhs.”

He said that the prime objective of CGTSI is to facilitate the flow of collateral free credit to the micro and SSI sector and encourage lenders to shift from collateral based or security oriented lending to project based lending.

“CGTSI has been trying to achieve this objective by extending guarantees to the Commercial Banks / Institutions, sanction credit to eligible borrowers based on the viability of the projects and seek guarantee cover from CGTSI against payment of one time guarantee fee and annual service charges. The Scheme has been operationalised with effect from 1st January, 2001 initially with loan cap of Rs 10 lakhs.. Subsequently, the Government decided to increase the eligibility limit of loans to be guaranteed from Rs. 10 lakhs to Rs. 25 lakhs which has now again been increased to Rs 50 lakhs,” Shakeel added

He said that necessary modifications have been carried out in the indenture of the Trust to enable CGTSI to guarantee loans up to Rs. 50 lakhs and to provide for counter guarantees to other institutions from August,200.

CGTSI commenced its operations with an initial corpus fund of Rs. 125 crore received from GOI and SIDBI in 4:1 funding pattern, has since been enhanced to Rs. 1350 crore and the Settlers have committed to enhance the corpus fund to Rs. 2500 crore over a period of five years. The CGTSI operates under the guidance and supervision of a Board of Trustees of which the Chief Managing Director of SIDBI is the Chairman, the Development Commissioner MSME and Additional Secretary in the Ministry of MSME is the Vice-Chairman.

The president FCIK further said that “although the Trust has so far guaranteed loans of over 1000 crores, the share of the J&K state is quite negligible. The main reason behind this is that neither the entrepreneurs nor the banks at lower level know much about the implementation of the scheme. It is with this objective that the awareness programme has been organized for the benefit of both entrepreneurs and banks wherein high level technical team from CGTSI, Mumbai will make a power point presentation besides responding to the queries from audience.”

The programme is being inaugurated by Minister of Finance, Planning and Law, Tariq Hameed Qarra on 18th of this month at J & K Bank corporate headquarters, Srinagar in presence of large number of existing and prospective entrepreneurs besides top officers of Reserve Bank of India, Small Industries Development Bank of India, State Finance Department, Industries Department and leading banks operating in J & K state

Source: etalaat.net