नवीनतम
Govt unveils Rs 20K cr credit guarantee scheme for MFIs
NEW DELHI [Maha Media]: In a significant move to strengthen financial inclusion and support small borrowers, the government has launched a revamped credit guarantee scheme aimed at boosting the microfinance sector and improving credit flow to underserved segments.
The new Credit Guarantee Scheme for Microfinance Institutions (CGSMFI-2.0), introduced by the Ministry of Finance, is expected to enable loans worth up to Rs 20,000 crore, benefiting nearly 36 lakh borrowers across the country.
The scheme is designed to encourage banks and financial institutions to extend loans to microfinance institutions by reducing their lending risk.
Under the framework, a substantial portion of the loan amount will be backed by guarantee cover, particularly benefiting smaller microfinance institutions that often face funding constraints.
To ensure affordability for end borrowers, the scheme also includes provisions to cap interest rates, making credit more accessible to low-income households and small entrepreneurs.
The guarantee support will be managed through National Credit Guarantee Trustee Company Limited, which will help enhance lender confidence and improve liquidity in the sector.
The initiative comes at a time when the microfinance industry has been facing challenges in accessing funds, leading to a slowdown in lending activities. By addressing these concerns, the government aims to revive credit flow and support income-generating activities, especially in rural and semi-urban areas.
The scheme will remain operational until June 30, 2026, or until the targeted guarantee amount is fully utilised.
With this move, the government is seeking to stabilise the microfinance ecosystem while ensuring that affordable credit reaches millions of small borrowers, thereby supporting livelihoods and driving inclusive economic growth.
