In this policy brief, we evaluate the design and operation of the public credit guarantee schemes for MSMEs present in India, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and the Credit Guarantee Fund for Micro Units (CGFMU), against the principles developed by the World Bank Group (WBG) and Financial Sector Reform and Strengthening (FIRST) Initiative for Public Credit Guarantee Schemes for MSMEs. Our evaluation reveals substantial gaps in the design and operation of these schemes along the dimensions of transparency, risk management, autonomy, and supervision when compared against the World Bank’s principles. Drawing on insights from the evaluation, we conclude with some policy actions that the Government can take to strengthen these schemes, especially in light of the catalytic role played by these guarantee schemes in enabling credit access to MSMEs.
The full policy brief is available here.
Cite this item
Srinivas, M., & George, D. (2021). A Principles-based Evaluation of Public MSME Credit Guarantee Schemes in India. Retrieved from Dvara Research.
Srinivas, Madhu, and Deepti George. 2021. A Principles-based Evaluation of Public MSME Credit Guarantee Schemes in India.
Srinivas, Madhu and Deepti George. A Principles-based Evaluation of Public MSME Credit Guarantee Schemes in India. 2021.