Credit Guarantee Schemes - A Tool For Economic And Social Upliftment

Credit guarantee programmes are designed to share the lending risk of the lenders and in turn, facilitate access to finance for the prospective borrowers.

- Rajesh Ranjan

But India is relatively late entrant to the world of credit guarantees when compared to other Asian, European or Latin American countries. Although ECGC (Formerly Export Credit Guarantee Corporation of India Ltd.), in late 1950s and DICGC (Deposit insurance and credit guarantee corporation) in 1960s had started working in the Indian credit guarantee space.

After that it took another 40 years for CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) to get established in year 2000 focusing Micro and small borrowers. After realizing the CGTMSE success with respect to MSE borrower which worked for single guarantee segment, the government relooked at expanding the credit guarantee space.

Subsequent to the Central Budget announcements to set up various credit guarantee funds, The ministry of finance established the new credit guarantee superstructure called NCGTC (National Credit Guarantee Trustee Company Ltd) To uplift the underperforming segments of the economy to the desired levels. A common trustee company in the name and style of National Credit Guarantee Trustee Company Ltd as set up by the Department of Financial Services, Ministry of Finance, and Government of India to act as a common trustee company to manage and operate various credit guarantee trust funds.

Overview of NCGTC:

(National Credit Guarantee Trustee Company Ltd)

NCGTC was incorporated under the Indian Companies Act, 1956 on March 28, 2014 with a paid-up capital of Rs. 10 crore, with its registered office at MSME Development Centre, C-11, G-Block, Bandra Kurla Complex, Bandra [East], Mumbai-400051.