Government of India has launched CGSMFI-2.0 with Rs 20000 crore corpus.
About CGSMFI-2.0
- Objective: To provide guarantee coverage to eligible Member Lending Institutions (MLIs) for financing Non-Banking Financial Company MFI (NBFC-MFI) and MFIs for on-lending to existing or new small borrowers.
- NBFC-MFI are non-deposit taking NBFC with minimum 75% of its total assets deployed towards “microfinance loans” (collateral-free loan a household with annual household income up to ₹3,00,000).
- Managed and operated by: National Credit Guarantee Trustee Company (NCGTC), wholly owned by Department of Financial Services, Ministry of Finance
- Tenure: June 2026 or till guarantees of Rs 20,000 crore are issued
About 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.
- Significance of Microfinance in India:
- Financial inclusion and Poverty Alleviation: Fills gap left by traditional banks, bringing low-income groups into formal financial system.
- Supports MSMEs and entrepreneurship: By providing tailored loans without mandatory collateral requirements.
- Women Empowerment: Women borrowers constitute 95% in microfinance sector. (Economic Survey 2025-26).
