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Government Extends Credit Guarantee Scheme for Microfinance Institutions

By Sahil Kaim --
Saturday, 20 Jun, 2026

The Government has extended the Credit Guarantee Scheme for Microfinance Institutions 2.0 (CGSMFI 2.0) until August 31, 2026, or until guarantees worth ₹20,000 crore are issued, whichever comes first. It has also increased the maximum loan limit for large NBFC MFIs and MFIs from ₹300 crore to ₹1,000 crore, within the existing cap of 20 per cent of Assets Under Management (AUM). Launched in March 2026, the scheme provides guarantee cover through the National Credit Guarantee Trustee Company Limited (NCGTC) to banks and financial institutions lending to microfinance institutions for onward lending to small borrowers. So far, loans worth ₹770 crore have been sanctioned under the scheme. The move is expected to improve utilisation of the scheme and enhance credit flow to the microfinance sector, enabling greater access to finance for small borrowers and underserved communities.

Government Extends Credit Guarantee Scheme for Microfinance Institutions. The Government has extended the Credit Guarantee Scheme for Microfinance Institutions 2.0 (CGSMFI 2.0) until August 31, 2026, or until guarantees worth ₹20,000 crore are issued, whichever comes first. It has also increased the maximum loan limit for large NBFC MFIs and MFIs from ₹300 crore to ₹1,000 crore, within the existing cap of 20 per cent of Assets Under Management (AUM). Launched in March 2026, the scheme provides guarantee cover through the National Credit Guarantee Trustee Company Limited (NCGTC) to banks and financial institutions lending to microfinance institutions for onward lending to small borrowers. So far, loans worth ₹770 crore have been sanctioned under the scheme. The move is expected to improve utilisation of the scheme and enhance credit flow to the microfinance sector, enabling greater access to finance for small borrowers and underserved communities.