{"id":88569,"date":"2026-11-12T18:30:00","date_gmt":"2026-11-12T13:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=88569"},"modified":"2026-11-12T18:30:19","modified_gmt":"2026-11-12T13:00:19","slug":"credit-guarantee-fund-for-micro-units-cgfmu","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/12-11-2026\/credit-guarantee-fund-for-micro-units-cgfmu","title":{"rendered":"Credit Guarantee Fund for Micro Units (CGFMU)"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/Governance; GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Union Cabinet has approved the continuation of the <strong>Credit Guarantee Fund for Micro Units (CGFMU) for five years up to March 2031.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The scheme provides <strong>credit guarantee coverage to the Lending Institutions<\/strong> through <strong>National Credit Guarantee Trustee Company Limited (NCGTC) <\/strong>against default risk.<\/li>\n\n\n\n<li>CGFMU was launched in <strong>2016 <\/strong>and has acted as a <strong>major catalyst in enabling the growth of Pradhan Mantri MUDRA Yojana (PMMY) loans in the country.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Salient features of the Scheme:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The fund provides guarantee to Lending Institutions (LIs) for the following credit facilities:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Loans extended to eligible micro enterprises under Pradhan Mantri Mudra Yojana (PMMY) upto Rs.20 lakh;<\/li>\n\n\n\n<li>Overdraft of upto Rs.10,000 provided by banks under Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts; and<\/li>\n\n\n\n<li>Loans granted to Self Help Group (SHG) where the portfolio is between Rs.10 lakh to Rs.20 lakh.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Guarantee Fee:<\/strong> Decrease in guarantee fee from @1% p.a. to @ 0.75% p.a. No change for SHG; continue to pay a guarantee fee of 0.25% for the first year and 0.50% in subsequent years.<\/li>\n\n\n\n<li><strong>Duration: <\/strong>The Scheme would be applicable to all loans extended under PMMY during the FY 2026-27 to FY 2030-31.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Significance:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Collateral free loans under Pradhan Mantri Mudra Yojana has created a whole new generation of entrepreneurs who previously could not avail loans from the formal banking system.<\/li>\n\n\n\n<li>The extension of CGFMU scheme will enable loans of Rs.12.6 lakh crore over next 5 years<\/li>\n\n\n\n<li>The scheme will act as a catalyst to young aspiring entrepreneurs to set up and grow their business.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.thehindu.com\/news\/national\/government-extends-micro-credit-guarantee-scheme-for-five-years\/article71690888.ece\" target=\"_blank\" rel=\"noopener\"><strong>TH<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong> Context <\/strong><\/p>\n<li class=\"ms-5\"> The Union Cabinet has approved the continuation of the Credit Guarantee Fund for Micro Units (CGFMU) for five years up to March 2031. <\/li>\n<p><\/p>\n<p><strong> About <\/strong><\/p>\n<li class=\"ms-5\"> \u00a0The scheme provides credit guarantee coverage to the Lending Institutions through National Credit Guarantee Trustee Company Limited (NCGTC) against default risk. <\/li>\n<li class=\"ms-5\">CGFMU was launched in 2016 and has acted as a major catalyst in enabling the growth of Pradhan Mantri MUDRA Yojana (PMMY) loans in the country.  <\/li>\n<p><a href=\"  https:\/\/www.nextias.com\/ca\/current-affairs\/12-11-2026\/credit-guarantee-fund-for-micro-units-cgfmu\" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-88569","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/88569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=88569"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/88569\/revisions"}],"predecessor-version":[{"id":88571,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/88569\/revisions\/88571"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=88569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=88569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=88569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}