India's Ministry of Finance has extended the Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) until August 31, 2026, or until Rs 20,000 crore in guarantees are issued. The maximum loan amount for eligible institutions has been increased to Rs 1,000 crore.
The extension and increased loan limits are expected to boost credit availability for microfinance institutions, potentially leading to greater financial inclusion for small borrowers in India.
India's Ministry of Finance has extended the Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) until August 31, 2026, or until guarantees totaling Rs 20,000 crore are issued, whichever occurs first. The extension also raises the maximum loan amount for eligible large Non-Banking Financial Company-Microfinance Institutions (NBFC-MFIs) and MFIs from Rs 300 crore to Rs 1,000 crore, within an overall ceiling of 20% of Assets under Management (AUM). The government anticipates these changes will improve scheme utilization and stimulate greater credit flow to the microfinance sector. The CGSMFI-2.0 was introduced to offer guarantee coverage to banks and financial institutions against potential losses from financial assistance provided to NBFC-MFIs and MFIs for on-lending to small borrowers. As of June 10, loans amounting to Rs 770 crore had been sanctioned under the scheme.
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