Updated February 2026 | Educational Tool
CGTMSE Calculator
Indicative assessment tool. This calculator provides estimates based on official CGTMSE guidelines. Final eligibility and loan approval depends on your bank's assessment.
Estimate your loan guarantee coverage percentage and annual fees based on the official 2026 CGTMSE guidelines. This tool is designed to help MSME owners understand potential guarantee support for business loans.
Why Trust Our Tool?
Important Disclaimers
Toolisky is an independent educational platform and is NOT affiliated with CGTMSE or any government department.
Final loan approval and CGTMSE coverage are determined solely by participating banks and financial institutions.
Understanding CGTMSE Coverage
The Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) is a government-backed credit guarantee program designed to reduce the lending risk for banks when issuing loans to small and micro enterprises. Many small business owners and entrepreneurs struggle to secure financing because banks require personal guarantees or collateral, which are often difficult to provide.
CGTMSE addresses this challenge by acting as a guarantor on behalf of the borrower. When a bank approves an MSME loan with CGTMSE coverage, the government guarantee scheme covers a percentage of the loan amount. If the borrower defaults on the loan, CGTMSE compensates the bank for the guaranteed portion of the loan.
This mechanism makes it easier for entrepreneurs to access financing without having to pledge personal assets or find third-party guarantors. The scheme has been instrumental in supporting India's MSME sector, enabling hundreds of thousands of small businesses, retail shops, manufacturing units, and service enterprises to obtain bank loans and grow their operations.
Coverage percentage refers to the portion of the loan amount that CGTMSE will guarantee to the bank. For example, if your loan is ₹25 lakh with 80% CGTMSE coverage, the guarantee covers ₹20 lakh. If the loan defaults, CGTMSE pays the bank up to ₹20 lakh.
The CGTMSE coverage percentage depends on two factors: your loan amount and your business category. Different categories—women entrepreneurs, SC/ST owners, micro enterprises, and general enterprises—receive different coverage levels to promote inclusive lending.
Example Scenario
Example: You are a micro enterprise owner seeking a ₹25 lakh loan for equipment purchase. Under CGTMSE 2026 guidelines, for loans between ₹5 lakh and ₹50 lakh, a micro enterprise receives 80% coverage. This means CGTMSE guarantees ₹20 lakh of your ₹25 lakh loan. The remaining ₹5 lakh is your responsibility.
Coverage Percentage by Loan Size (2026)
| Loan Size | Women / ZED | Micro | SC/ST | General |
|---|---|---|---|---|
| Up to ₹5 Lakh | 90% | 85% | 85% | 80% |
| ₹5 Lakh to ₹50 Lakh | 85% | 80% | 80% | 75% |
| ₹50 Lakh to ₹1 Crore | 75% | 75% | 75% | 75% |
| ₹1 Crore to ₹10 Crore | 75% | 75% | 75% | 75% |
To access CGTMSE coverage, borrowers pay an annual fee to the guarantee scheme. This fee is calculated as a percentage of the guaranteed amount and varies based on the loan size. The fee covers the operational costs of the guarantee scheme and compensates it for taking on credit risk.
The annual fee is charged every year for the duration of the loan. However, many banks adjust the fee structure by reducing the loan disbursement amount rather than collecting it separately from borrowers.
Fee Calculation Example
Example: You have a ₹25 lakh loan as a micro enterprise with 80% coverage (₹20 lakh guaranteed). For loans between ₹10 lakh and ₹50 lakh, the CGTMSE fee is 0.55% annually on the guaranteed amount. This equals ₹1,100 per year (₹20 lakh × 0.55%). Most banks deduct this from your loan amount.
CGTMSE Fee Rates (Annual)
| Loan Size | Standard Rate | Women/SC-ST (with 10% discount) |
|---|---|---|
| Up to ₹10 Lakh | 0.37% | 0.33% |
| ₹10 Lakh to ₹50 Lakh | 0.55% | 0.50% |
| ₹50 Lakh to ₹1 Crore | 0.60% | 0.54% |
| ₹1 Crore to ₹2 Crore | 1.20% | 1.08% |
| ₹2 Crore to ₹5 Crore | 1.35% | 1.22% |
| ₹5 Crore to ₹10 Crore | 1.50% | 1.35% |
This calculator is designed for any entrepreneur or business owner considering an MSME loan with CGTMSE coverage. It works for:
Not Eligible: The CGTMSE scheme does not cover loans for agricultural activities, educational institutions, or certain regulated sectors. Additionally, loans exceeding ₹10 crore in size are not eligible for coverage under this scheme.
Before applying for an MSME loan with CGTMSE coverage, verify that your business meets these basic eligibility criteria:
Udyam Registration Required
Register for free at udyam.gov.in. Udyam registration is mandatory and can be completed online in under 10 minutes using your PAN and Aadhar.
Manufacturing or Service Business
Your business must engage in manufacturing or service delivery. Agricultural activities and educational institutions are not eligible.
New or Existing Business
Both new startups and established businesses can apply. There is no minimum operating period required.
Loan Amount Within Limits
Loans must be between ₹50,000 and ₹10 crore. The maximum guarantee available is ₹10 crore.
Bank Lending Partner
The loan must be sourced through a bank or financial institution participating in the CGTMSE scheme. Most public and private banks participate.
Repayment Capacity
Your business must demonstrate the ability to service the loan through regular revenue generation.
This tool is designed to be user-friendly and intuitive. Whether you are a first-time entrepreneur or an experienced business owner, you can quickly estimate your CGTMSE coverage and fees in just a few steps.
Step 1: Enter Your Loan Amount
Input the loan amount you are planning to request from your bank. The calculator accepts loan amounts from ₹50,000 to ₹10 crore. Simply enter the principal amount you need to borrow for your business. For example, if you plan to invest ₹25 lakh in equipment, enter 2500000.
Step 2: Select Your Business Category
Choose the category that best describes your business situation. Your options include General Business, Micro Enterprise, Woman Entrepreneur, SC/ST Owner, and ZED Certified. Select the one that applies to you. If you have multiple attributes (for example, you are both a woman and run a micro enterprise), choose the one that is your primary classification.
Step 3: Click the Calculate Button
Once you have entered your loan amount and selected your category, click the Calculate button. The tool will process your inputs instantly and generate your results based on the official 2026 CGTMSE guidelines.
Step 4: Review Your Results
The calculator displays three key outputs: (1) Estimated Coverage Percentage - the approximate percentage of your loan that CGTMSE will guarantee; (2) Guarantee Amount - the indicative rupee amount CGTMSE will cover; (3) Annual Fee - the estimated yearly charge for the guarantee coverage. These results are estimates for planning purposes.
Step 5: Understand the Context
Remember that these are indicative figures based on standard guidelines. Your bank will confirm actual coverage, fee structure, and other loan terms during your formal loan application process. Use these estimates to understand the typical range of coverage and costs you might expect.
This calculator is beginner-friendly and requires no technical knowledge. You can run multiple scenarios by changing the loan amount or category to compare different options.
This tool is relevant for a wide range of small and medium business owners. The following groups will find this calculator particularly useful:
Small Shop Owners and Retailers
If you own a retail shop, grocery store, or small trading business, this calculator helps you estimate loan support available for inventory purchase, shop renovation, or working capital expansion.
Manufacturing Unit Owners
Owners of small manufacturing units planning to invest in machinery, raw materials, or facility expansion can use this tool to understand potential CGTMSE coverage for equipment loans or production expansion.
Service Business Operators
Service providers—such as consultants, repair shops, beauty salons, coaching centers, or IT service providers—can estimate coverage for loans used to purchase equipment, expand premises, or hire additional staff.
First-Time Entrepreneurs
Starting a new business is challenging, especially when seeking initial funding. This calculator helps new entrepreneurs understand what guarantee support they might receive, building confidence in the loan application process.
Existing MSMEs Planning Expansion
If you have an established MSME and are planning to expand—open a second location, upgrade equipment, or increase production capacity—this tool helps estimate support available for expansion loans.
MSME Loan Applicants
Anyone actively applying for an MSME loan can use this calculator to better understand the role of CGTMSE in their loan package and the associated costs before meeting with their bank.
Why This Matters: This calculator provides quick, educational guidance without requiring you to visit banks or contact government offices. You get instant answers about potential coverage and fees, helping you make informed financial decisions.
The CGTMSE calculator is most useful when you are at specific points in your business planning or loan journey:
Before Applying for an MSME Loan
If you are considering applying for a bank loan, use this calculator beforehand to estimate what guarantee coverage and fees you might encounter. This gives you a realistic picture of the guarantee component of your loan package before you approach your bank.
While Planning Business Expansion
When you are developing an expansion plan and need to understand financing options, this calculator helps you estimate the cost of CGTMSE coverage for the expansion loan. It allows you to factor guarantee fees into your overall business plan.
Comparing Loan Options from Different Banks
If different banks are offering MSME loans with varying terms, this calculator helps you understand the CGTMSE coverage and fee components. While interest rates may differ, the CGTMSE coverage will be similar across banks based on official guidelines.
Understanding Guarantee Coverage Before Signing Documents
Just before you finalize a loan with your bank, you can use this tool to verify that the CGTMSE coverage and fees mentioned in your loan offer align with what the official guidelines suggest. It helps you spot any discrepancies.
Educating Yourself About MSME Lending Support
Even if you are not immediately applying for a loan, this tool is valuable for understanding how CGTMSE works, who benefits most, and how guarantee schemes support small business growth.
By using this CGTMSE calculator, you will gain practical knowledge about several important aspects of MSME lending and guarantee schemes:
Approximate Coverage Percentage
You will understand what percentage of your loan amount would be covered by CGTMSE based on your loan size and business category. For example, you might learn that your ₹30 lakh loan as a general business would receive approximately 75% coverage.
Estimated Guarantee Protection Amount
The calculator shows you the rupee amount CGTMSE would guarantee on your loan. This helps you understand how much of your loan is protected by the government guarantee scheme, giving you a clearer picture of risk sharing.
Indicative CGTMSE Fee or Processing Cost
You will see the approximate annual fee charged for CGTMSE coverage. Understanding this cost upfront helps you calculate the true cost of borrowing and factor it into your business financial planning.
How Business Category Affects Your Coverage
The calculator demonstrates how your business classification—whether you are a woman entrepreneur, micro business, SC/ST owner, or general business—impacts your coverage percentage and fee. This insight helps you understand why different categories receive different support levels.
How Loan Size Influences Coverage and Fees
By testing different loan amounts, you learn how CGTMSE coverage percentages and fees change as your loan size increases. Smaller loans generally receive higher coverage percentages, which you can now see in action.
Realistic Expectations for Your Loan Application
Rather than approaching your bank with guesswork, this tool gives you realistic expectations about the guarantee and fee components of MSME loans, helping you prepare better questions for your lender.
Understanding the role of CGTMSE in the broader MSME lending ecosystem helps you appreciate why this guarantee scheme is important for small business growth:
Collateral-Free Lending Support
Traditionally, banks required personal guarantees or physical collateral (like property or jewelry) to approve loans. Many small business owners lack significant collateral. CGTMSE removes this barrier by guaranteeing the loan on behalf of the borrower, allowing collateral-free lending for eligible MSME applicants.
Risk Transfer to Government
Banks reduce their credit risk when a loan is backed by CGTMSE. Instead of carrying the full default risk, the bank knows that a portion of the loan is guaranteed by the government scheme. This reduced risk makes banks more willing to lend to small businesses, which they might otherwise consider too risky.
Faster Loan Approval Process
Because CGTMSE coverage reduces the bank's risk, loan approval timelines become shorter. Banks process CGTMSE-backed loans more quickly than non-guaranteed loans of similar size, enabling faster access to funds for entrepreneurs.
Access to Larger Loan Amounts
Many small business owners might only qualify for a small unsecured loan without a guarantee scheme. With CGTMSE coverage, they can access larger loan amounts suitable for meaningful business expansion or equipment purchase.
Lower Overall Borrowing Costs
Although CGTMSE charges a fee, the overall impact on borrowing costs is often favorable. The guarantee enables borrowers to access loans that they might otherwise be denied, or the guarantee might result in slightly lower interest rates, offsetting the guarantee fee.
Encourages Business Formalization
CGTMSE coverage is available only to registered Udyam enterprises. This incentivizes business owners to formalize their operations by registering, which brings them into the formal economy and enables access to various government support schemes.
Before you apply for a CGTMSE-covered MSME loan, familiarize yourself with these important points to ensure a smooth application process:
Udyam Registration is Mandatory
You must have a valid Udyam registration before applying for a CGTMSE-covered loan. Udyam registration is free, can be completed entirely online at udyam.gov.in in about 10 minutes, and requires only your PAN and Aadhar. Many entrepreneurs delay this step unnecessarily, but it is your gateway to CGTMSE and other government MSME support.
Verify Your Business Activity is Eligible
CGTMSE covers manufacturing, service, and trading businesses. However, agricultural activities, educational institutions, and certain regulated sectors are excluded. Review the official eligibility list or ask your bank to confirm whether your specific business activity qualifies for CGTMSE coverage.
Bank Verification Will Occur
Your bank will verify your business operations, revenue, repayment capacity, and business purpose for the loan. CGTMSE coverage does not mean automatic approval; banks still conduct thorough due diligence. Be prepared to provide evidence of your business operations and financial stability.
Prepare Your Documentation Early
Gather your Udyam registration certificate, PAN, Aadhar, recent bank statements (usually 12 months), business address proof, business registration documents (if applicable), and details about the loan's intended use. Having documentation ready speeds up the application process.
Understand Your Loan Purpose
CGTMSE covers loans for business purposes such as equipment purchase, inventory, working capital, business expansion, and infrastructure development. The loan cannot be used for personal purposes, debt repayment, or non-business activities. Be clear about what you will use the loan for.
Factor in Repayment Capacity
Banks assess your business income and existing obligations to determine your loan repayment capacity. While CGTMSE provides a guarantee, you must still demonstrate the ability to repay the loan from your business revenue. Inflate your income projections, as banks verify claims.
The process of obtaining an MSME loan with CGTMSE coverage involves coordination between you, the bank, and the guarantee scheme administrator. Here is the typical workflow:
Step 1: Register on Udyam Portal
Visit udyam.gov.in and complete your business registration. You will need your PAN (Permanent Account Number) and Aadhar. The process takes approximately 10 minutes and is completely free. You will receive a Udyam number that certifies your business status.
Step 2: Approach a Bank or Lender
Apply for an MSME loan at your preferred bank or financial institution. Most public sector banks (SBI, PNB, Bank of India) and several private banks participate in the CGTMSE scheme. Submit your Udyam registration certificate along with your loan application.
Step 3: Bank Processes CGTMSE Coverage
The bank will evaluate your loan application and determine the CGTMSE coverage eligibility. The bank handles all interactions with the guarantee scheme. You do not need to register separately with CGTMSE.
Step 4: Loan Approval and Disbursement
Upon approval, your loan is disbursed. The bank deducts the CGTMSE fee from the loan amount and remits it to the guarantee scheme. You receive the net amount (loan minus fee).
To understand how the CGTMSE calculator works, review these realistic scenarios based on the 2026 guidelines:
Scenario 1: Micro Enterprise Loan of ₹5 Lakh
- ✓Loan Amount: ₹5 lakh
- ✓Business Category: Micro Enterprise
- ✓Coverage Percentage: 85% (as per 2026 guidelines for micro enterprises up to ₹5L)
- ✓Guarantee Amount: ₹4.25 lakh
- ✓Applicable Fee Rate: 0.37% annually
- ✓Annual Fee: ₹1,574.50 (calculated on ₹4.25 lakh guaranteed amount)
- ✓Net Disbursement: Approximately ₹4.98 lakh (after fee deduction)
Scenario 2: Woman Entrepreneur Loan of ₹25 Lakh
- ✓Loan Amount: ₹25 lakh
- ✓Business Category: Woman Entrepreneur
- ✓Coverage Percentage: 85% (as per 2026 guidelines for women entrepreneurs ₹5L–₹50L)
- ✓Guarantee Amount: ₹21.25 lakh
- ✓Applicable Fee Rate: 0.55% annually (with 10% discount for women = 0.495%)
- ✓Annual Fee: ₹10,521 (₹21.25 lakh × 0.495%)
- ✓Net Disbursement: Approximately ₹24.89 lakh (after fee deduction)
Scenario 3: General Enterprise Loan of ₹75 Lakh
- ✓Loan Amount: ₹75 lakh
- ✓Business Category: General Enterprise
- ✓Coverage Percentage: 75% (as per 2026 guidelines for general enterprises ₹50L–₹1Cr)
- ✓Guarantee Amount: ₹56.25 lakh
- ✓Applicable Fee Rate: 0.60% annually
- ✓Annual Fee: ₹33,750 (₹56.25 lakh × 0.60%)
- ✓Net Disbursement: Approximately ₹74.66 lakh (after fee deduction)
Frequently Asked Questions
? What coverage percentage will I receive under CGTMSE?
Your coverage percentage depends on your loan amount and business category. For loans up to ₹5 lakh, coverage ranges from 80% (general enterprises) to 90% (women entrepreneurs and ZED-certified units). For larger loans between ₹5 lakh and ₹50 lakh, coverage decreases slightly. For loans exceeding ₹50 lakh, coverage is typically 75% across all categories. Use the calculator above to determine your specific coverage.
? Is this CGTMSE calculator actually free?
Yes, this CGTMSE calculator is completely free. No registration is required, and no personal information is collected. The calculator uses publicly available CGTMSE guidelines to provide estimates for planning purposes.
? What special benefits do women entrepreneurs receive?
Women entrepreneurs receive preferential treatment under CGTMSE. For loans up to ₹5 lakh, women receive 90% coverage compared to 80% for general enterprises. For larger loans, the advantage continues but at slightly lower percentages (85% for loans ₹5L–₹50L versus 75% for general enterprises). Additionally, women entrepreneurs receive a 10% discount on the CGTMSE fee.
? Do SC/ST business owners receive special coverage?
Yes, SC/ST entrepreneurs are also prioritized under CGTMSE. For loans up to ₹5 lakh, SC/ST owners receive 85% coverage. For loans between ₹5 lakh and ₹50 lakh, they receive 80% coverage. Like women entrepreneurs, SC/ST owners also receive a 10% discount on the annual fee.
? What is the difference between micro enterprises and general enterprises?
A micro enterprise, as defined under the MSME Development Act, is a manufacturing unit with investment in plant and machinery up to ₹25 lakh, or a service enterprise with investment in equipment up to ₹10 lakh. Micro enterprises receive higher coverage percentages compared to general enterprises. The distinction helps promote support for truly small-scale operations.
? How much fee will I pay in the first year?
Your annual fee depends on your loan amount and business category. For example, a ₹25 lakh loan for a micro enterprise with 80% coverage (₹20 lakh guaranteed) would incur an annual fee of 0.55%, equaling approximately ₹1,100. Women entrepreneurs pay 10% less, approximately ₹990 annually. Use the calculator to determine your exact fee.
? What happens if my loan defaults?
If you default on your loan, the bank can invoke the CGTMSE guarantee. CGTMSE will compensate the bank for the guaranteed portion of the loan based on your coverage percentage. For example, with 80% coverage on a ₹25 lakh loan, CGTMSE covers up to ₹20 lakh. You remain responsible for the remaining ₹5 lakh.
? Is there a maximum guarantee amount under CGTMSE?
Yes. The maximum guarantee amount is ₹10 crore, which corresponds to the maximum loan size of ₹10 crore. Additionally, women entrepreneurs may receive supplementary subsidy up to ₹1 crore from some state governments, depending on local policies.
? Is there any cost for registering on Udyam?
No, Udyam registration is completely free. You can register at udyam.gov.in using your PAN and Aadhar. The process takes approximately 10 minutes. Be cautious of intermediaries offering to register you for a fee—registration must always be done directly through the official government portal.
? Can I access CGTMSE for service businesses and retail shops?
Yes, CGTMSE covers manufacturing businesses, service enterprises, and retail trading businesses. The scheme does not apply to agricultural activities, educational institutions, or certain regulated sectors. Consult with your bank to verify that your specific business type is eligible.
? Is CGTMSE coverage optional when applying for an MSME loan?
CGTMSE coverage is not mandatory. You can apply for an MSME loan without CGTMSE coverage. However, banks often prefer lending to borrowers with CGTMSE coverage because it reduces their credit risk, potentially making loan approval faster and offering better terms.
? What documents do I need to provide when applying for CGTMSE coverage?
Typically, you will need your Udyam registration certificate, PAN card, Aadhar card, recent bank statements, business address proof, and details about your business. Your bank will provide a complete list of required documents during the application process.
? Can I cancel CGTMSE coverage after obtaining it?
CGTMSE coverage typically remains active throughout your loan tenure. Once you repay the loan in full, the guarantee automatically ceases. You cannot cancel coverage unilaterally, but if you prepay your loan, the coverage obligation ends.
? What happens if I delay loan repayment?
CGTMSE does not charge penalties for delayed repayment. However, your bank will charge interest and late fees as per your loan agreement. It is important to repay your loan on time according to the agreed schedule to avoid additional costs and maintain a good credit history.
This free CGTMSE calculator estimates your guarantee coverage percentage and annual fees based on official 2026 guidelines. The calculator supports all business categories—general enterprises, micro businesses, women entrepreneurs, SC/ST owners, and ZED-certified units. All calculations are based on publicly available government data and are provided for educational estimation purposes only. Your actual coverage and fees will be determined by your bank during the loan approval process.
This content is based on publicly available CGTMSE 2026 guidelines and MSME financing best practices.
Last Updated: February 2026 | For Educational Estimation Purposes Only