Credit Guarantee Scheme for Microfinance Institutions (CGSMFI-2.0) (Indian Economy)
Credit Guarantee Scheme for Microfinance Institutions (CGSMFI-2.0) (Indian Economy)
Why In News:
The government extended the validity of CGSMFI-2.0 up to 31 August 2026. Guarantees worth Rs 20,000 crore are to be issued.
Maximum loan limit for Large Sized NBFC-MFIs has been increased from Rs 300 crore to Rs 1,000 crore.
About the Scheme
Launched: 20 March 2026.
Provides credit guarantee cover to Banks and Financial Institutions (FIs) through the National Credit Guarantee Trustee Company Limited (NCGTC).
Covers losses on loans extended to NBFC-MFIs and MFIs for on-lending to small borrowers.
Key facts for Prelims
Guarantee Coverage: 80% (small NBFC-MFIs), 75% (medium), 70% (large NBFC-MFIs and MFIs).
Eligible Borrowers: Existing or new small borrowers within the regulatory definition of microfinance as prescribed by RBI.
NCGTC: National Credit Guarantee Trustee Company Limited- the nodal agency for several credit guarantee schemes including CGSMFI. A company set up under the Ministry of Finance.
RBI definition of Microfinance Loans: Collateral-free loans to households with annual income up to Rs 3,00,000.