Government Unveils Rs 20,000-Crore Lifeline for Struggling Microfinance Sector

The government has approved a Rs 20,000-crore credit guarantee scheme to support microfinance institutions (MFIs), which face funding challenges and rising non-performing assets. This scheme offers guarantees for loans provided by banks and other lenders to MFIs and is expected to improve liquidity and financial inclusion.

In an effort to bolster the microfinance sector, the government has rolled out a Rs 20,000-crore credit guarantee scheme to aid microfinance institutions (MFIs) grappling with financial pressures.

The Credit Guarantee Scheme for Microfinance Institutions 2.0 aims to secure loans disbursed by member lending institutions, including banks, to MFIs and non-banking finance company-MFIs (NBFC-MFIs) until June.

Industry bodies such as Microfinance Institutions Network (MFIN) and Sa-Dhan have lauded this initiative, highlighting its potential to boost liquidity and enhance financial inclusion across the nation.

(With inputs from agencies.)