Modified AGF Structure- Standard rate (SR)

With a view to incentivize the borrowers with good repayment track record, AGF would be
charged on the outstanding loan amount instead of guaranteed amount for credit facilities
sanctioned / renewed to MSEs on or after April 01, 2018 as detailed below:

Annual Guarantee Fee (AGF) [% p.a.]*

Women, Micro Enterprises and
Credit Facility
Units covered in North East Others
Region
Up to 5 Lakhs 1.00 + Risk Premium as per extant guidelines of the Trust
Above 5 Lakhs
1.35 + Risk Premium as per 1.50 + Risk Premium as per extant
and up to 50
extant guidelines of the Trust guidelines of the Trust
Lakhs
Above 50 Lakhs
and up to 200 1.80 + Risk Premium as per extant guidelines of the Trust
Lakhs
*AGF will be charged on the guaranteed amount for the first year and on the
outstanding amount for the remaining tenure of the credit facility.

MSE Retail Trade Activity, the AGF will be charged at 2% of the guaranteed amount for the
first year and on the outstanding amount for the remaining tenure of the credit facility.
Differential pricing structure depending upon NPA / Claim payout ratio of the MLI will also be
applicable on the AGF as per CGTMSE Circular No.107/2015-16 dated January 28, 2016.

Additional risk premium of 15% will be charged on the applicable rate to MLIs who exceed the
pay-out threshold limit of 2 times more than thrice in last 5 years. This premium will be
applicable for all guarantee accounts irrespective of the sanction date.

Charging of Annual Service Fee (ASF) / Annual Guarantee Fee (AGF) at differential rates
depending upon NPA levels/ Claim Payout ratio of MLIs

Considering the very high level of NPAs reported by some of the MLIs as also significantly
larger amount of claims settled for some of the MLIs, the Trust had introduced risk based
pricing structure for cases sanctioned on or after April 01, 2016. The Trust had introduced
following risk premium structure in place of existing guarantee fee structure:

(1) Risk premium on NPAs in (2) Risk premium on Claim

Guaranteed portfolio Payout Ratio

NPA Percentage Risk Premium Claim Payout Risk Premium
Percentage
0-5% SR 0-5% SR
>5-10% 10% of SR >5-10% 10% of SR
>10-15% 15% of SR >10-15% 15% of SR
>15-20% 20% of SR >15-20% 20% of SR
>20% 25% of SR >20% 25% of SR
SR–Standard Rate
 Annual Guarantee Fee (AGF)

Guarantee cover extended by CGTMSE for loans sanctioned on or after January 01, 2013 in
respect of any specific borrower shall be valid provided the MLI concerned pays an Annual
Guarantee Fee (AGF).

The demand on MLIs for Annual Guarantee Fee (AGF) in respect of fresh guarantees would be
raised upon approval of guarantee cover. The AGF / guarantee cover would be valid for one
year from the material date i.e. Guarantee start date. In the subsequent financial year in the
month of April, demand for AGF (i.e. for 2nd AGF) would be raised for the guarantees
approved in the previous financial year (till March 31st) for which the AGF has been received
till March 31. Such demand would be w.e.f. the date on which previous AGF is expiring till
March 31 of that year. The AGF demands for subsequent years would be on "Full Financial
Year basis" excepting for the terminal year of guarantee where AGF demand would be till
validity of guarantee cover.

Composite all-in Guarantee Fee as under: -

Annual Guarantee Fee (AGF) [% p.a.]

Women, Micro Enterprises and
Credit Facility
units in North East Region (incl. Others
Sikkim)
Upto .5 lakh 0.75 1.00
Above .5 lakh and upto .200
0.85 1.00
lakh

Such AGF is to be paid by the MLI on or before two months from the demand date. The Trust
reserves the right to revise the annual fee from time to time.

Annual Service Fee (ASF)

Guarantee cover extended by CGTMSE for loans sanctioned prior to January 01, 2013 in
respect of any specific borrower shall be valid provided the MLI concerned pays an Annual
Service Fee (ASF) of 0.50% on the amount guaranteed for credit facilities up to .5 lakh and
0.75% on the amount guaranteed for credit facilities beyond .5 lakh and up to .100 lakh.

Cost to the borrower

The Credit Guarantee Scheme leaves it to the discretion of the MLIs to decide about passing
on the incidence of Annual Guarantee Fee (AGF) to the borrower or alternatively they may
decide to bear it themselves.

Interest rate payable by borrower

"Any credit facility which has been sanctioned by the lending institution (all scheduled
commercial banks, selected financial institutions) and NBFCs with the maximum interest rate
not more than 14% p.a. and 18% p.a. respectively including cost of guarantee cover"