Tamil Nadu has emerged as one of the top-performing states under the credit guarantee fund trust for micro and small enterprises (CGTMSE) scheme, with credit guarantees and employment generation showing strong growth over the past three financial years, according to data from FY2023-24 to June 30, 2026.Set up in 2000 by the Ministry of MSME and SIDBI, CGTMSE provides collateral-free credit guarantees to micro and small enterprises. With more than 1.49 crore cumulative guarantees approved for a total value of `15.12 lakh crore, CGTMSE has become a key pillar of India’s MSME financing ecosystem.The number of guarantees approved for Tamil Nadu MSMEs rose from 1,13,815 in FY2023-24 to 1,79,817 in FY2024-25, before moderating to 1,53,804 in FY2025-26. In the current financial year up to June 30, 2026, 28,747 guarantees have already been approved, according to information provided by Union Minister of State for MSMEs Shobha Karandlaje in the Lok Sabha.The corresponding loan amounts guaranteed rose from `15,061cr in FY2023-24 to ` 21,547cr in FY2024-25 and `30,072cr in FY2025-26. In the first quarter of FY2026-27, `6,816cr has already been approved.“CGTMSE does more than guarantee a loan—it gives entrepreneurs the confidence to turn their ideas into growth, without letting the fear of collateral stand in the way. When capital reaches capable entrepreneurs, MSMEs don’t just grow businesses—they create jobs, support families and strengthen the nation,” says M K Anand, an MSME advisor and founder and partner of See Change Consulting.Tamil Nadu ranked behind Uttar Pradesh, Maharashtra and Karnataka in employment generation, with CGTMSE-backed lending estimated to have generated 4.12 lakh jobs in FY2023-24, 5.35 lakh in FY2024-25 and 7.40 lakh in FY2025-26 — an increase of nearly 80% in two years. Another 2.04 lakh jobs were estimated to have been generated in first quarter of FY2026-27.Nationally, CGTMSE-backed lending is estimated to have created 48.20 lakh jobs in FY2023-24, 72.95 lakh in FY2024-25 and 96.09 lakh in FY2025-26, with another 24.39 lakh in the first quarter of FY2026-27. Tamil Nadu has consistently ranked among the top states, alongside Maharashtra, Uttar Pradesh and Karnataka.Since its inception, CGTMSE-backed lending in Tamil Nadu has resulted in 10.99 lakh guarantees worth `1,10,838 crore. Uttar Pradesh leads with 21.33 lakh guarantees worth `1,58,250 crore, followed by Maharashtra with 12.49 lakh guarantees worth `1,91,536 crore. TN is ahead of Karnataka (10.28 lakh guarantees; `1,10,157 cr) and Gujarat (7.08 lakh; `1,32,887 cr) in the number of guarantees.The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, passed the Rajya Sabha on August 3 and the Lok Sabha on August 7, marking a major update to the MSMED Act, 2006, which has completed 20 years.The amendment comes amid rapid changes in the MSME landscape driven by technology, digital systems and evolving legal and business requirements. The number of MSMEs registered on the Udyam portal has risen from 1.65 crore in April 2023 to 9.16 crore now. The sector employs more than 40 crore people and remains a key pillar of the Indian economy. The amendments, aligned with the Government’s Viksit Bharat @2047 vision, seek to strengthen the legal framework for MSMEs, improve ease of doing business, decriminalise certain provisions, promote enterprise growth and address delayed payments to micro and small enterprises.
