Credit Guarantee Scheme for Microfinance Institutions-2.0 Latest News
Recently, the Government of India has approved extension in validity of the Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) upto 31.8.2026.
About Credit Guarantee Scheme for Microfinance Institutions-2.0
- It was launched in 2026.
- 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.
- The Government of India has also approved an increase in maximum loan amount capped to Large Sized NBFC-MFIs/MFIs from ₹300 crores to ₹1000 crores under the overall ceiling of 20% of Assets under Management (AUM).
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).
What is Microfinance?
- It refers to the provision of small-scale financial services, including loans, savings, and insurance, to individuals and small businesses that lack access to traditional banking services.
Source: PIB
Last updated on Sep, 2026
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Credit Guarantee Scheme for Microfinance Institutions-2.0 FAQs
Q1. Which organization provides guarantee cover under CGSMFI-2.0?+
Q2. What is Microfinance?+
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