Explanation:

Correct Option: (a) Explanation:  Statement 3 is incorrect: The CGTMSE scheme provides guarantees to help small businesses access loans. Guarantees provided by the scheme ranges from 75- 85% of the loan. Such guarantee schemes are bene fi cial to banks as well as they do not have to set aside provisions for the guaranteed portion if it turns bad. Supplementary notes Credit Guarantee Funds for Micro and Small Enterprises (CGTMSE)  CGTMSE is launched in the year 2000, is a loan offered by the Ministry of Medium, Small and Micro Enterprises (MSME) in collaboration with Small Industries Development Bank of India (SIDBI).  This is a government-backed loan scheme for small businesses and traders. It provides credit guarantees to various microfi nancial institutions, like small fi nance banks, and non-banking fi nancial companies, which give loans to MSMEs.  Credit Guarantee Scheme (CGS) was launched on August 30, 2000, and became operational with effect from January 1, 2000, to strengthen the credit delivery system.  The scheme also aims to facilitate the fl ow of credit to the MSE sector, and create access to fi nance for various small- and mediumscale business owners. Why in the news?  A revamped credit guarantee scheme for India’s micro and small enterprises recently came into effect, with the annual guarantee fee for loans up to Rs 1 crore getting reduced from the peak 2 per cent to 0.37 percent, reducing the overall cost of credit for small business.