Ministry of Finance press release · 21 March 2026 · pibtracker filter

Government introduces Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0)

PRID2243314 MinistryMinistry of Finance Released21 March 2026 Reading8 min

Scheme aims to provide credit guarantee support through NCGTC to strengthen lending to MFIs, Facilitates increased credit flow of up to ₹20,000 crore to the NBFC- MFIs Approximately 36 lakh MFI borrowers estimated to benefit from the scheme Posted On: 21 MAR 2026 2:00PM by PIB Delhi The Government of India has introduced Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0). The scheme aims to provide guarantee cover to Banks/ FIs through National Credit Guarantee Trustee Company Limited (NCGTC) 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. Salient 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). Interest Rate: Capped at EBLR or MCLR + 2% p.a., on loans by MLIs to NBFC-MFIs or MFIs. While on-lending to small borrowers, these lenders shall cap the interest rate at 1% below the average rate of lending in past 6 months. Valid till 30.06.2026 or loans till Rs. 20,000 crores are guaranteed, whichever is earlier. Impact: 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 . Background: Microfinance plays a key role in Financial Inclusion by delivering credit to people at the bottom of the economic pyramid. NBFC-MFIs and MFIs are the key participants in the microfinance lending business. In view of ongoing financial stress in the microfinance sector, there has been a slowdown in lending by banks to MFIs due to which smaller MFIs are struggling to get loans. The scheme aims to encourage lending institutions to provide funding to NBFC-MFIs or MFIs for on lending to small borrowers within the regulatory definition of micro finance as prescribed by the Reserve Bank of India. ***** NB/AD (Release ID: 2243314) Visitor Counter : 3928 Read this release in: Urdu , Marathi , हिन्दी , Gujarati , Kannada Ministry of Finance Government introduces Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) Scheme aims to provide credit guarantee support through NCGTC to strengthen lending to MFIs, Facilitates increased credit flow of up to ₹20,000 crore to the NBFC- MFIs Approximately 36 lakh MFI borrowers estimated to benefit from the scheme Posted On: 21 MAR 2026 2:00PM by PIB Delhi The Government of India has introduced Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0). The scheme aims to provide guarantee cover to Banks/ FIs through National Credit Guarantee Trustee Company Limited (NCGTC) 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. Salient 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). Interest Rate: Capped at EBLR or MCLR + 2% p.a., on loans by MLIs to NBFC-MFIs or MFIs. While on-lending to small borrowers, these lenders shall cap the interest rate at 1% below the average rate of lending in past 6 months. Valid till 30.06.2026 or loans till Rs. 20,000 crores are guaranteed, whichever is earlier. Impact: 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 . Background: Microfinance plays a key role in Financial Inclusion by delivering credit to people at the bottom of the economic pyramid. NBFC-MFIs and MFIs are the key participants in the microfinance lending business. In view of ongoing financial stress in the microfinance sector, there has been a slowdown in lending by banks to MFIs due to which smaller MFIs are struggling to get loans. The scheme aims to encourage lending institutions to provide funding to NBFC-MFIs or MFIs for on lending to small borrowers within the regulatory definition of micro finance as prescribed by the Reserve Bank of India. ***** NB/AD (Release ID: 2243314) Scheme aims to provide credit guarantee support through NCGTC to strengthen lending to MFIs, Facilitates increased credit flow of up to ₹20,000 crore to the NBFC- MFIs Approximately 36 lakh MFI borrowers estimated to benefit from the scheme" /> The Government of India has introduced Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0). The scheme aims to provide guarantee cover to Banks/ FIs through National Credit Guarantee Trustee Company Limited (NCGTC) 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. Salient features of the scheme: <ul style="margin-left:40px"> <li style="text-align:justify">Eligible borrowers: Existing or new small borrowers within the regulatory definition of micro finance as prescribed by RBI from time to time.</li> <li style="text-align:justify">Guarantee coverage: 80% of amount in default for small, 75% for medium and 70% for large NBFC-MFIs/ MFIs.</li> <li style="text-align:justify">Guarantee Fee: 0.50% p.a., on sanctioned amount (1st year) & outstanding amount (thereafter).</li> <li style="text-align:justify">Interest Rate: Capped at EBLR or MCLR + 2% p.a., on loans by MLIs to NBFC-MFIs or MFIs. While on-lending to small borrowers, these lenders shall cap the interest rate at 1% below the average rate of lending in past 6 months.</li> <li style="text-align:justify">Valid till 30.06.2026 or loans till Rs. 20,000 crores are guaranteed, whichever is earlier.</li> </ul> Impact: 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. Background: Microfinance plays a key role in Financial Inclusion by delivering credit to people at the bottom of the economic pyramid. NBFC-MFIs and MFIs are the key participants in the microfinance lending business. In view of ongoing financial stress in the microfinance sector, there has been a slowdown in lending by banks to MFIs due to which smaller MFIs are struggling to get loans. The scheme aims to encourage lending institutions to provide funding to NBFC-MFIs or MFIs for on lending to small borrowers within the regulatory definition of micro finance as prescribed by the Reserve Bank of India. ***** NB/AD " /> var mPlayer = document.getElementById("background_music"); var mPlayAction = document.getElementById("playbutton"); var isPlaying = false; function playAudio() { mPlayer.play(); isPlaying = true; document.getElementById('stopA').style.display = "block"; document.getElementById('playA').style.display = "none"; } function pauseAudio() { mPlayer.pause(); isPlaying = false; document.getElementById('playA').style.display = "block"; document.getElementById('stopA').style.display = "none"; } //function HandleAudio() { // if (isPlaying == true) { // //Playing already Pause it // pauseAudio(); // } else { // //Play the music // playAudio(); // } //} var synth = window.speechSynthesis; function CleanHtml(html) { html = html.replace(/ /gi, ''); return html; } function stripHtml(html) { let tmp = document.createElement("DIV"); tmp.innerHTML = CleanHtml(html); return tmp.textContent || tmp.innerText || ""; } $(document).ready(function () { //for responsive tables $("table").each(function () { if (!$(this).closest(".table-responsive").length) { $(this).wrap(" "); } }); var width = $(window).width(); if (width $(document).ready(function () { var width = $(window).width(); if (width @media print { .sticky-social, .sticky-social_mb, .pull-right, #printPDF { display: none !important; } } .f_vl { padding-right: 30px; font-size: 17px; cursor: pointer; } .log_oo { // width: 20%; display: flex; justify-content: space-between; } .log_oo img { width: 150px; /*width: 100%; height: auto;*/ } .sticky-social_mb { position: fixed; bottom: 0px; padding: 0px; margin: 0px; width: 100%; } .social_mb { list-style: none; display: flex; width: 100%; margin-bottom: -8px; } .social_mb a { padding: 8px 0px; font-size: 30px; transition: all 0.8s ease-in-out; width: 20% !important; text-align: center; } .section1 { position: relative; padding: 10px 0px; 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font-weight: 600 !important; } } /* === Film Roll Badge Styling(IFFI2025 countdown) === */ .film-roll-badge { position: absolute; top:82%; right: 20px; width: 230px; height: 70px; background: repeating-linear-gradient( to right, #9a2375 0px, #9a2375 18px, #6e2b8b 18px, #6e2b8b 36px ); border-top: 8px solid #9a2375; border-bottom: 8px solid #9a2375; border-radius: 8px; overflow: hidden; box-shadow: 0 4px 12px rgba(0, 0, 0, 0.4); animation: moveFilm 8s linear infinite; z-index: 10; } /* film sprocket holes */ .film-roll-badge::before, .film-roll-badge::after { content: ""; position: absolute; width: 100%; height: 10px; background: repeating-linear-gradient( to right, #9a2375 0px, #9a2375 10px, #fff 10px, #fff 20px ); left: 0; z-index: 2; } .film-roll-badge::before { top: -4px; } .film-roll-badge::after { bottom: -4px; } .film-roll-inner { position: relative; height: 100%; display: flex; align-items: center; justify-content: center; animation: flicker 2s infinite ease-in-out; } .countdown-text { font-size: 1.3rem; font-weight: 700; color: #fff; text-shadow: 0 0 6px rgba(255, 255, 255, 0.4), 0 0 10px #000; white-space: nowrap; } /* === Animations === */ @keyframes moveFilm { 0% { background-position: 0 0; } 100% { background-position: 120px 0; } } @keyframes flicker { 0%, 100% { opacity: 1; } 50% { opacity: 0.9; } 25% { opacity: 0.95; } 75% { opacity: 0.85; } } /* === Responsive Adjustments === */ @media (max-width: 1500px) { .film-roll-badge { top: 68%; right: 18px; /* width: 220px; */ height: 65px; font-size: 0.85rem; } .press-section { margin-top: 35px; } } @media (max-width: 992px) { .film-roll-badge { top: 52%; right: 10px; width: 200px; height: 60px; } } @media (max-width: 768px) { .film-roll-badge { top: 56%; right: 10px; width: 124px; height: 55px; } .countdown-text { font-size: 0.9rem; } } @media (max-width: 576px) { .film-roll-badge { top: 59%; right: 5px; /* width: 160px; */ height: 50px; } .countdown-text { font-size: 0.85rem; } } const festivalStart = new Date("2025-11-20T00:00:00").getTime(); const festivalEnd = new Date("2025-11-28T23:59:59").getTime(); const countdownElement = document.getElementById("countdown"); const interval = setInterval(() => { const now = new Date().getTime(); // BEFORE FESTIVAL — show days + hours left if (now = festivalStart && now el.style.width = "350px"); clearInterval(interval); } }, 1000); //

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Government introduces Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0)

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