A collateral-free loan under CGTMSE carries an annual guarantee fee. Under RIPS 2024, Rajasthan pays that fee back to you — 100% of it, for seven years. Here's how CGTMSE works and how to claim the reimbursement.
Many small businesses can't offer the collateral banks want. CGTMSE solves this by acting as a guarantor: the trust covers a large share of the loan if the borrower defaults, so the bank can lend without collateral or an outside guarantee. In return, the borrower pays an annual guarantee fee (a percentage of the outstanding or sanctioned amount). It's a genuine, recurring cost — and it's exactly the cost RIPS 2024 removes.
Under RIPS 2024, for MSMEs availing collateral-free loans up to ₹5 crore under CGTMSE, the state reimburses 100% of the annual guarantee fee paid to the lender, for a period of 7 years. The effect is that a first-time or asset-light entrepreneur can access institutional credit without collateral and without carrying the ongoing guarantee-fee cost — the biggest practical barriers to formal credit both fall away at once.
The state has also, in various measures, supported enhanced guarantee coverage for certain categories (for example, additional coverage for women-led enterprises). The exact coverage and any category-specific enhancement follow the notified guidelines, so confirm what applies to your loan.
This is the part that makes CGTMSE reimbursement so attractive: it is not one of the mutually-exclusive asset-creation options. It sits alongside them. A single MSME can typically combine:
| Benefit | Nature |
|---|---|
| One asset-creation incentive — SGST, Capital, or Turnover-Linked | Choose one |
| Interest subsidy (up to 6%) | Stacks on top |
| EPF/ESI reimbursement (50%) | Stacks on top |
| CGTMSE fee reimbursement (100%) | Stacks on top |
Illustrative; the actual fee depends on your lender's CGTMSE fee rate and outstanding balance.
| Parameter | Value |
|---|---|
| Collateral-free CGTMSE loan | ₹2,00,00,000 |
| Indicative annual guarantee fee | ₹2,00,000 (illustrative) |
| Reimbursement rate | 100% |
| Duration | 7 years |
| Indicative lifetime fee saved | ≈ ₹10–14 lakh |
Fee rates vary by loan size, category and CGTMSE's prevailing schedule, and the fee is usually charged on a reducing outstanding — so treat the total as a range.
It's an annual fee a borrower pays for a collateral-free loan guaranteed by CGTMSE — effectively the cost of the trust standing as guarantor so the bank can lend without security. Under RIPS 2024, Rajasthan reimburses 100% of this fee for eligible loans up to ₹5 crore, for 7 years.
In addition. It is not one of the mutually-exclusive asset-creation incentives — it stacks on top of your chosen SGST/Capital/Turnover option, alongside the interest subsidy and EPF/ESI reimbursement.
Collateral-free loans up to ₹5 crore covered under the CGTMSE scheme. Loans above that ceiling, or loans not covered under CGTMSE, don't qualify for this particular reimbursement.
Up to 7 years, claimed annually against proof of the guarantee fee actually paid to your lender.
No — the whole point of CGTMSE is to enable collateral-free and third-party-guarantee-free lending for eligible micro and small enterprises, with the trust guaranteeing the loan to the bank.
We help MSMEs structure CGTMSE-covered loans and claim the 100% fee reimbursement year after year — alongside the rest of their RIPS benefits. Tell us about your project and we'll map what you can claim. The first assessment is free.
Related reading: RIPS 2024 Complete Guide · RIPS 2024 Interest Subsidy · EPF/ESI Reimbursement · BRUPY for SC/ST · Subsidy Calculator
CA Nikhil Gupta will personally review your project and map every eligible Rajasthan & central subsidy — free assessment, no upfront fee.
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