Government extends Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) validity till March 2026, increasing loan limits from ₹10 lakh to ₹50 lakh for individual borrowers and ₹25 lakh to ₹1.25 crore for group loans. The scheme, operated through National Credit Guarantee Trustee Company Limited (NCGTC), provides 75% guarantee coverage to lenders. Extension aims to enhance credit access for underserved populations, particularly women entrepreneurs and rural communities, supporting financial inclusion goals.

CGSMFI-2.0 represents government's commitment to deepening financial inclusion through risk mitigation for lenders serving microfinance sector. The scheme addresses the fundamental challenge where traditional banks hesitate to lend to microfinance institutions due to perceived higher risks and lack of conventional collateral from end borrowers. By providing 75% credit guarantee, government effectively de-risks lending, encouraging banks and NBFCs to expand credit to MFIs who then serve the last-mile customers. The substantial increase in loan limits—from ₹10 lakh to ₹50 lakh for individuals and ₹25 lakh to ₹1.25 crore for groups—reflects evolving credit needs of micro-entrepreneurs who have graduated from subsistence to growth-oriented activities. This is particularly significant for women's self-help groups and joint liability groups that form the backbone of India's microfinance ecosystem. The scheme's extension till March 2026 provides policy continuity crucial for long-term planning by MFIs and their banking partners. It aligns with government's broader financial inclusion agenda, complementing schemes like Pradhan Mantri Jan Dhan Yojana and Stand-Up India, creating a comprehensive ecosystem for bottom-of-pyramid financing.