{"id":375478,"date":"2026-11-12T15:11:41","date_gmt":"2026-11-12T09:41:41","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=375478"},"modified":"2026-11-12T15:11:41","modified_gmt":"2026-11-12T09:41:41","slug":"credit-guarantee-fund-for-micro-units-cgfmu","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/credit-guarantee-fund-for-micro-units-cgfmu\/","title":{"rendered":"Credit Guarantee Fund for Micro Units (CGFMU)"},"content":{"rendered":"<div class=\"content-box-green\">\n<p><strong>News:<\/strong> The Union Cabinet has approved the continuation of Credit Guarantee Fund for Micro Units (CGFMU) for a period of five years.<\/p>\n<\/div>\n<h2 class=\"red-h2-box\">About Credit Guarantee Fund for Micro Units (CGFMU)<\/h2>\n<figure style=\"width: 299px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/encrypted-tbn0.gstatic.com\/images?q=tbn:ANd9GcQ5JQdv3Kv8nuglhJYsmr2-FY85d4-ECEIIPSXuyfJJL6vZfjz4yQdptOg&amp;s=10\" alt=\"Credit Guarantee Fund for Micro Units (CGFMU)\" width=\"299\" height=\"401\" \/><figcaption class=\"wp-caption-text\">Source: PIB<\/figcaption><\/figure>\n<ul>\n<li><strong>Credit Guarantee Fund for Micro Units (CGFMU)<\/strong> provides<strong> credit guarantee coverage<\/strong> to the <strong>Lending Institutions through<\/strong> <strong>National Credit Guarantee Trustee Company Limited (NCGTC)<\/strong> against default risk.<\/li>\n<li><strong>Managing agency: <\/strong>The scheme will be implemented by<strong> National Credit Guarantee Trustee Company Ltd (NCGTC).<\/strong><\/li>\n<li><strong>Timeline:<\/strong> The Scheme would be applicable to<strong> all loans extended under PMMY during the 16th Finance Commission Cycle i.e. FY 2026-27 to FY 2030-31.<\/strong>\n<ul>\n<li>The extension of the scheme will enable loans of<strong> Rs. 12.6 lakh crore over the next five years.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Features:<\/strong> The purpose of the fund is to provide guarantee to Lending Institutions (LIs) for the following credit facilities:\n<ul>\n<li><strong>Loans <\/strong>extended to eligible<strong> micro enterprises<\/strong> under<strong> Pradhan Mantri Mudra Yojana (PMMY) <\/strong>upto<strong> Rs.20 lakh;<\/strong><\/li>\n<li><strong>Overdraft of upto Rs.10,000<\/strong> provided by banks under<strong> Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts;<\/strong> and<\/li>\n<li><strong>Loans granted to Self Help Group (SHG<\/strong>) where portfolio is<strong> between Rs.10 lakh to Rs.20 lakh.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Guarantee coverage:<\/strong> It is <strong>linked to the disbursement amount<\/strong> in case of <strong>working capital limits<\/strong> and <strong>outstanding amount for term loan accounts<\/strong> to reflect the actual risk exposure of LIs.<\/li>\n<li><strong>Guarantee Fee:<\/strong> <strong>Decrease in guarantee fee from @1% p.a. to @ 0.75% p.a<\/strong>.\n<ul>\n<li><strong>No change for SHG<\/strong>; continue to pay guarantee fee of 0.25% for the first year and 0.50% in subsequent years.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 class=\"red-h2-box\"><strong>About Pradhan Mantri Mudra Yojana (PMMY)<\/strong><\/h2>\n<figure id=\"attachment_375483\" aria-describedby=\"caption-attachment-375483\" style=\"width: 271px\" class=\"wp-caption aligncenter\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-375483\" src=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/11\/Source-PIB-1.jpg?resize=271%2C300&#038;ssl=1\" alt=\"Pradhan Mantri Mudra Yojana (PMMY)\" width=\"271\" height=\"300\" srcset=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/11\/Source-PIB-1.jpg?resize=271%2C300&amp;ssl=1 271w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/11\/Source-PIB-1.jpg?w=506&amp;ssl=1 506w\" sizes=\"auto, (max-width: 271px) 100vw, 271px\" \/><figcaption id=\"caption-attachment-375483\" class=\"wp-caption-text\">Source &#8211; PIB<\/figcaption><\/figure>\n<ul>\n<li><strong>Pradhan Mantri MUDRA Yojana (PMMY)<\/strong> was launched for <strong>providing loans up to Rs.10 Lakh to the non-corporate, non-farm small\/micro enterprises.<\/strong>\n<ul>\n<li><strong>MUDRA, <\/strong>which stands for<strong> &#8216;Micro Units Development &amp; Refinance Agency Ltd&#8217;<\/strong>, is a <strong>financial institution<\/strong> set up under PMMY for <strong>development and refinancing micro unit enterprises<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Launch year:<\/strong> It was launched in year <strong>2015.<\/strong><\/li>\n<li><strong>Aim:<\/strong> PMMY <strong>aims<\/strong> to provide <strong>financial inclusiveness and support<\/strong> to the marginalized and hitherto <strong>socio-economically neglected classes<\/strong>.<\/li>\n<li><strong>Nodal Ministry:<\/strong> <span data-subtree=\"aimfl,mfl\">The nodal ministry for the scheme i<\/span>s<strong> Department of Financial Services, Ministry of Finance.<\/strong><\/li>\n<li><strong>Activities:<\/strong> The loans are given for<strong> income generating activities in manufacturing, trading and services sectors and for activities allied to agriculture.<\/strong><\/li>\n<li><strong>Loans offered by:<\/strong> Under PMMY, collateral free loans of up to Rs. 10 Lakh are extended by<strong> Member Lending Institutions (MLIs) viz Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Non-Banking <\/strong><strong>Financial Companies (NBFCs), Micro Finance Institutions (MFIs) etc.<\/strong><\/li>\n<li><strong>Categories:<\/strong> MUDRA loans are offered in<strong> three categories <\/strong>as following:<\/li>\n<\/ul>\n<table style=\"height: 228px; width: 100%; border-collapse: collapse; border-style: solid; background-color: #fcffff;\">\n<tbody>\n<tr style=\"height: 108px;\">\n<td style=\"width: 20%; height: 108px;\"><b>Category<\/b><\/td>\n<td style=\"width: 20%; height: 108px;\"><b>Loan Amount<\/b><\/td>\n<td style=\"width: 19.9516%; height: 108px;\"><b>Target Segment<\/b><\/td>\n<td style=\"width: 20%; height: 108px;\"><b>Share of Total Loans<\/b><\/td>\n<td style=\"width: 20%; height: 108px;\"><b>Key Sectors Funded<\/b><\/td>\n<\/tr>\n<tr style=\"height: 30px;\">\n<td style=\"width: 20%; height: 30px;\"><b>Shishu<\/b><\/td>\n<td style=\"width: 20%; height: 30px;\"><span style=\"font-weight: 400;\">Up to \u20b950,000<\/span><\/td>\n<td style=\"width: 19.9516%; height: 30px;\"><span style=\"font-weight: 400;\">First-time entrepreneurs, nano-units<\/span><\/td>\n<td style=\"width: 20%; height: 30px;\"><b>~<\/b>88%<span style=\"font-weight: 400;\"> of total loans<\/span><\/td>\n<td style=\"width: 20%; height: 30px;\"><span style=\"font-weight: 400;\">Street vendors, tailoring, petty shops, dairy, home-based work<\/span><\/td>\n<\/tr>\n<tr style=\"height: 30px;\">\n<td style=\"width: 20%; height: 30px;\"><b>Kishore<\/b><\/td>\n<td style=\"width: 20%; height: 30px;\"><span style=\"font-weight: 400;\">\u20b950,001\u2013\u20b95 lakh<\/span><\/td>\n<td style=\"width: 19.9516%;\"><span style=\"font-weight: 400;\">Small-scale expansion, working capital<\/span><\/td>\n<td style=\"width: 20%; height: 30px;\"><span style=\"font-weight: 400;\">~9\u201310% of total loans<\/span><\/td>\n<td style=\"width: 20%;\"><span style=\"font-weight: 400;\">Food stalls, repair shops, beauty parlors, transport<\/span><\/td>\n<\/tr>\n<tr style=\"height: 30px;\">\n<td style=\"width: 20%; height: 30px;\"><b>Tarun<\/b><\/td>\n<td style=\"width: 20%; height: 30px;\"><span style=\"font-weight: 400;\">\u20b95\u2013\u20b910 lakh<\/span><\/td>\n<td style=\"width: 19.9516%;\"><span style=\"font-weight: 400;\">Growth-stage small businesses<\/span><\/td>\n<td style=\"width: 20%; height: 30px;\"><span style=\"font-weight: 400;\">~2% of total loans<\/span><\/td>\n<td style=\"width: 20%; height: 30px;\"><span style=\"font-weight: 400;\">Manufacturing, logistics, services, retail stores<\/span><\/td>\n<\/tr>\n<tr style=\"height: 30px;\">\n<td style=\"width: 20%; height: 30px;\"><b>Tarun Plus<\/b><\/td>\n<td style=\"width: 20%; height: 30px;\">Loans above \u20b910 lakh and up to \u20b920 lakh<\/td>\n<td style=\"width: 19.9516%; height: 30px;\" colspan=\"3\">Designed specifically for Tarun category, who have previously availed and successfully repaid loans<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>News: The Union Cabinet has approved the continuation of Credit Guarantee Fund for Micro Units (CGFMU) for a period of five years. About Credit Guarantee Fund for Micro Units (CGFMU) Credit Guarantee Fund for Micro Units (CGFMU) provides credit guarantee coverage to the Lending Institutions through National Credit Guarantee Trustee Company Limited (NCGTC) against default&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/credit-guarantee-fund-for-micro-units-cgfmu\/\">Continue reading <span class=\"screen-reader-text\">Credit Guarantee Fund for Micro Units (CGFMU)<\/span><\/a><\/p>\n","protected":false},"author":10366,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,956,12039],"tags":[11872,3590],"class_list":["post-375478","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-schemes-and-programs","category-knolls","tag-9pm-daily-factly","tag-pib","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/375478","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10366"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=375478"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/375478\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=375478"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=375478"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=375478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}