Credit Guarantee Scheme for Microfinance Institutions-2.0 Latest News
Recently, the Government of India has introduced Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0).
About Credit Guarantee Scheme for Microfinance Institutions-2.0
- It aims to provide guarantee cover to Banks/ FIs through National Credit Guarantee Trustee Company Limited (NCGTC).
- It provides guarantee against expected losses on the financial assistance extended by them to Non-Banking Financial Company-Microfinance Institutions (NBFC-MFIs) and MFIs for on lending to small borrowers.
Features of the scheme
- Eligible borrowers: Existing or new small borrowers within the regulatory definition of micro finance as prescribed by RBI from time to time.
- Guarantee coverage: 80% of amount in default for small, 75% for medium and 70% for large NBFC-MFIs/ MFIs.
- Guarantee Fee: 0.50% p.a., on sanctioned amount (1st year) & outstanding amount (thereafter).
- Valid till 30.06.2026 or loans till Rs. 20,000 crores are guaranteed, whichever is earlier.
Impact of the scheme
- The scheme will facilitate increased credit flow to the MFI sector.
- It is estimated that the scheme will facilitate on-lending by NBFC-MFIs/ MFIs to approximately 36 lakh small borrowers.
Source: PIB
Last updated on March, 2026
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Credit Guarantee Scheme for Microfinance Institutions-2.0 FAQs
Q1. What is the primary objective of the Credit Guarantee Scheme for Microfinance Institutions-2.0?+
Q2. What is the guarantee coverage for small NBFC-MFIs/MFIs under the scheme?+
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