National Credit Guarantee Trustee Company Ltd [NCGTC] was set up by the Department of Financial Services, Ministry of Finance, Government of India incorporated under the Companies Act 1956 on March 28, 2014. NCGTC, inter alia, act as a common trustee company to manage and operate various credit guarantee trust funds. At present, there are five dedicated credit guarantee Trusts under the Management of NCGTC viz. Credit Guarantee Fund Scheme for Educational Loans (CGFEL), Credit Guarantee Fund Scheme for Skill Development (CGFSD), Credit Guarantee Fund Scheme for Factoring (CGFF), Credit Guarantee Fund for Micro Units (CGFMU) and Credit Guarantee Fund for Stand Up India (CGFSI) with a combined corpus of ₹ 13,000 crore.
The idea of common trustee company to manage above five multiple guarantee trust funds by NCGTC was intended to achieve operational efficiencies and economies of scale through sharing of combined resources such as technology, premises, manpower, risk management solutions and other support services. It also serves as a part of larger financial inclusion of the government, covering different cross-sections and segments of economy like students, micro entrepreneurs, women entrepreneurs SMEs, Skill and vocational training needs etc.
The brief information of the Trust Funds managed by NCGTC is as under:
- Credit Guarantee Fund for Skill Development (CGFSD): Credit guarantee programmes of CGFSD are designed to share the lending risk of the member banks of IBA for skill development loans up to ₹ 1.5 lakh extended without collateral or third-party guarantee.
- Credit Guarantee Fund for Education loans (CGFEL): Credit guarantee programmes of CGFEL offers guarantees for Education Loans by the member banks of IBA up to ₹ 7.5 lakh extended without collateral or third-party guarantee.
- Credit Guarantee Fund for Factoring (CGFF): CGFF offers guarantees for factored debts of MSMEs.
- Credit Guarantee Fund for Micro Units (CGFMU): The Trust offers Guarantees for loans up to the specified limit (currently ₹ 10Lakh) sanctioned by Banks / NBFCs / MFIs / other financial intermediaries engaged in providing credit facilities to eligible micro units. Also, Overdraft loan amount of ₹ 5,000/- sanctioned under PMJDY accounts shall also be eligible to be covered under this Credit guarantee Fund.
- Credit Guarantee Fund for Standup India (CGFSI): CGFSI extends guarantees for credit facilities of over ₹ 10 lakh & up to ₹ 100 lakh sanctioned by the eligible lending institutions, under the Stand-Up India Scheme (SC/ST/Women for setting up Greenfield enterprises).