NEW DELHI: Prime Minister Narendra Modi on Wednesday hailed the Union Cabinet’s approval for extending the Credit Guarantee Fund for Micro Units (CGFMU) for a further five-year term until March 31, 2031, describing the intervention as a game-changing catalyst for aspiring young entrepreneurs and grassroots enterprise creation across India.
The CGFMU mechanism provides sovereign credit guarantee coverage through the National Credit Guarantee Trustee Company (NCGTC) to commercial banks, NBFCs, and micro-finance institutions against default risks on collateral-free micro loans.
“The Cabinet approval for continuation of the Credit Guarantee Fund for Micro Units is a major boost for India’s aspiring entrepreneurs, especially our youth!” Prime Minister Modi stated. “A dedicated corpus of ₹5,000 crore will help facilitate over ₹12.5 lakh crore in institutional MUDRA advances over the next five years, providing robust credit guarantee support for collateral-free loans up to ₹20 lakh under the Pradhan Mantri MUDRA Yojana (PMMY).”
The Prime Minister highlighted that rationalised, lower guarantee fee structures will actively incentivise formal financial institutions to expand collateral-free micro credit, enabling enterprising youths to translate innovative business concepts into commercial ventures and transition from job-seekers into job-creators.
In tandem, the Union Cabinet also sanctioned the continuation of the Stand-Up India Scheme for an identical five-year horizon up to March 31, 2031. The flagship initiative focuses on fostering greenfield entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST), targeting financial assistance to an additional 2.5 lakh marginalized entrepreneurs over the upcoming five-year window.
“These strategic approvals provide fresh impetus to inclusive enterprise creation, grassroot industrialisation, and widespread economic self-reliance,” the Prime Minister added.
Published by True Roots Media