Union Cabinet on
January 6 accorded its approval for the creation of a Credit Guarantee
Fund for MUDRA loans. It also approved conversion of Micro Units
Development Refinance Agency, into MUDRA (SIDBI) Bank, as a wholly owned
subsidiary of the Small Industries Development Bank of India, SIDBI.
MUDRA Credit Guarantee Fund is expected to guarantee more than Rs
1,00,000 crore worth of loans to micro and small units in the first
The scheme assures establishment of CGFMU for guaranteeing loans
sanctioned under Pradhan Mantri Mudra Yojana with effect from 8th April,
2015, with the objective to reduce the credit risk to Banks / NBFCs /
MFIs / other financial intermediaries, who are Member Lending
The National Credit Guarantee Trustee Company Ltd. (NCGTC Ltd.), a
wholly-owned company of Government of India shall be the Trustee of the
Under the scheme, the guarantee would be provided on portfolio basis to
a maximum extent of 50% of Amount in Default in the portfolio.
The MUDRA (SIDBI) Bank will undertake refinance operations and provide
support services with focus on portal management; data analysis etc.
apart from any other activity entrusted/ advised by Government of India.