“It’s not about easy or hard — it’s about the chosen path. Every successful entrepreneur builds courage before comfort.”
When India’s MSME exporters struggle to get large-value loans for growth, the new proposed modification in MCGS for exporters steps in like a strong financial backbone. Launched in January 2025, this scheme is a game-changer — providing a 60% government-backed guarantee on export-related loans up to ₹100 crore.
If you are an MSME dreaming to scale beyond borders, this is one of the most powerful financial tools available today.
You may also like to read:How CGTMSE Loan Helped My Small Business Grow Without Collateral: A very important scheme for New Entrepreneurs.
My Honest Admission as an Exporter about MCGS for Exporters
To be honest, until recently, even as an exporter myself, I only knew about the pre-shipment and post-shipment export credit options that banks offer — loans that are often collateral-free but limited in scope.
I used to search online for new export finance options, thinking I already knew most of them. But I had never heard about this MCGS for exporters scheme for MSME exporters until now.
And that made me wonder — if I, as an active exporter, didn’t know about it, how many thousands of MSME exporters across India might also be unaware of such a powerful opportunity?
This realization is exactly why I decided to write this blog — to spread awareness among entrepreneurs who are busy building businesses but might be missing out on schemes that could change their growth story.
What is the MCGS for Exporters Scheme?
The Modified Credit Guarantee Scheme (MCGS) is a flagship initiative under the National Credit Guarantee Trustee Company Ltd. (NCGTC). It’s designed to help MSME exporters access larger credit facilities from banks without pledging heavy collateral.
Under this scheme:
- Banks and financial institutions (called Member Lending Institutions – MLIs) get a 60% government guarantee cover.
- Loans up to ₹100 crore per eligible MSME exporter are covered.
- The credit can be used for export operations, capital expansion, technology upgrades, or equipment purchases.
In simple words, the government shares the bank’s lending risk, allowing MSME exporters to secure bigger, faster, and easier funding for their growth.
Why MCGS Matters for MSME Exporters
- Easier Access to Big Loans – Banks hesitate to lend large sums to small exporters. MCGS reduces that hesitation.
- Boosts Global Competitiveness – Helps MSMEs modernize machinery, upgrade technology, and scale exports.
- Supports “Make in India, Make for the World” – Encourages more exporters to step into the global supply chain.
- Promotes Formal Credit – Reduces dependence on informal or high-interest lenders.
- Builds Confidence – When risk is shared, ambition can grow.
Key Highlights of the MCGS Scheme 2025
| Feature | Description |
|---|---|
| Launched by | Ministry of Finance (through NCGTC) |
| Launch Date | January 2025 |
| Coverage | 60% of the credit amount |
| Maximum Loan Size | ₹100 crore per borrower |
| Eligible Borrowers | MSME exporters with valid Udyam and IEC registration |
| Eligible Credit | Term loans, export credit, working capital, or post-shipment finance |
| Guarantee Duration | Up to 8 years |
| Fee | Nil in sanction year, 1.5% for next 3 years, then 1% annually |
| Scheme Tenure | 4 years or until ₹7 lakh crore guarantee limit reached |
MCGS vs CGTMSE — Understanding the Difference
| Parameter | MCGS (2025) | CGTMSE |
|---|---|---|
| Full Form | Modified Credit Guarantee Scheme | Credit Guarantee Fund Trust for Micro & Small Enterprises |
| Administered by | NCGTC | SIDBI and Ministry of MSME |
| Target Audience | MSME Exporters | Domestic MSMEs |
| Loan Coverage Limit | Up to ₹100 crore | Up to ₹5 crore |
| Guarantee Cover | 60% | 75%–85% |
| Focus Area | Export credit, technology upgrades, global expansion | Collateral-free startup and working capital loans |
| Purpose | Enable exporters to access high-value credit | Help small enterprises start and sustain growth |
| Beneficiary Type | Export-oriented MSMEs | Domestic manufacturing and service MSMEs |
| Managed By | Ministry of Finance | Ministry of MSME |
In short:
While CGTMSE empowers small businesses to start and expand domestically, MCGS is designed for exporters who are ready to scale globally. Together, they complete the MSME financing ecosystem — from starting up to stepping into international markets.
Recent Good News for Exporters under MCGS
- The government is planning to double the guarantee limit to ₹200 crore for well-performing MSMEs and reduce guarantee fees, making it more attractive for exporters.
Read on Economic Times - A specialized version of the MCGS for exporters with easier norms and lower deposits is being discussed.
Read on Financial Express - The government has also announced an Export Promotion and Modernisation (EPM) package worth ₹25,000 crore to support MSME exporters against tariff impacts.
Read on Times of India - Tax refund benefits for exporters have been reinstated from June 2025 to improve export competitiveness.
Read on Reuters
My Take as an Entrepreneur
Entrepreneurship isn’t easy or hard — it’s a choice. And every chosen path begins tough, but becomes meaningful when you persist with conviction.
I’ve never hesitated to explore ideas, but I’ve learned something valuable here: sometimes, our growth is limited not by resources, but by awareness.
If I had known about MCGS earlier, I might have used it to scale faster. And that’s why I want every MSME exporter reading this to explore it — talk to your bank, check your eligibility, and make use of this scheme.
Schemes like MCGS don’t promise success — they promise opportunity. What you make of it is your entrepreneurial story.
Your product deserves the world — and the MCGS is your ticket to reach it.
References and Resources
- PIB Press Release: Launch of MCGS Scheme, January 2025
- Business Standard: MCGS to boost MSME exports
- IBEF Report on MCGS Benefits for Exporters
- Financial Express: New credit cover for MSME exporters
- Economic Times: Credit guarantee may be doubled, fee reduced
