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Image MSME MARGIN

  1.  Margin Requirements
     
    • Promoter's contribution (margin) is basically a commitment of the promoter towards the project.
    • The margin amount may differ from borrower to borrower as well as on the basis of asset class to be financed.
    • Hence after taking into consideration the bankability of the project, the bank may stipulate suitable margin requirement.

  2.  Collateral Requirements:

    • Credit assistance to MSEs upto Rs.10 lakhs is extended without any collateral securities
    • Collateral free financial assistance above Rs.10 lakhs and upto Rs.200.00 lakhs is extended to Micro & Small Enterprises as per operational guidelines
    • All the eligible collateral free loans extended to Micro & Small Enterprises borrowers are covered under Credit Guarantee Scheme of Credit guarantee Fund Trust for Micro & Small Enterprises (CGTMSE)
    • Further, CGTMSE has introduced new “Hybrid Security” product i.e. Partial Collateral security under Credit Guarantee Scheme wherein the Bank shall be allowed to obtain collateral security for a part of the credit facility, whereas the remaining part of the credit facility, upto a maximum of Rs.200 lakhs, can be covered under Credit Guarantee Scheme of Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE).
    • For financial assistance above Rs.200 lakhs to Micro & Small Enterprises, collateral security requirement is decided on case to case basis on individual merits considering various factors including risks related to the activity after conducting due diligence about the promoters.
    • In other cases the quantum of collateral coverage is decided based on the activity and risk involved with the activity / promoters

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