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Credit Guarantee Scheme for MFI -2.0 – NCGTC

Government of India, on March 20, 2026, through the Ministry of Finance, Department of Financial Services has formulated the Credit Guarantee Scheme for MFIs -2.0 (CGSMFI -2.0) to provide guarantee coverage to eligible Member Lending Institutions (MLIs) for the funding provided by them to NBFC-MFIs and MFIs for on-lending to existing or new small borrowers within the RBI definition of microfinance. Facility will be guaranteed by National Credit Guarantee Trustee Company Limited (NCGTC), a wholly owned trustee company of Government of India.

Scheme Name Credit Guarantee Scheme for Microfinance Institutions – 2.0 (CGSMFI)
Guarantee Coverage
Guarantee Cover Type of MFIs (in terms of Size)
70% Large (with more than Rs 2000 cr. of AUM)
75% Medium (between Rs 500-2000 cr of AUM)
80% Small(with less than Rs 500 cr. Of AUM)

AUM: Asset Under Management
Validity Till 30th June 2026 or till guarantees for an amount of Rs.20,000 crore are issued by NCGTC, whichever is earlier.
Guarantee Fee 0.5% of the sanction amount (first year) and outstanding amount (thereafter)
On-Lending Facility
  • Amount: capped at 20% of AUM of respective NBFC-MFI/MFI subject to maximum of Rs.100 crore to Small size, Rs.200 crore to Medium size and ₹1000 crore to large size NBFC-MFIs/MFIs.
Tenor of Guarantee
  • Maximum 3 years
Interest rate
  • Capped at EBLR or 1-year MCLR + up to 2 % p.a
Guarantee fee & Security required by NCGTC
  • Guarantee fee: 0.5% of sanction amount (1st year) and outstanding amount thereafter.
  • No additional security required by NCGTC
Requirements to be complied by NBFC- MFI / MFI
  • Loans to be utilized for creation of fresh loan assets. These assets should be created within a period of 3 months from the date of disbursement of each tranche of loans
  • Separate account to be opened for credit facility extended to the eligible small borrowers under the Scheme
  • Assistance extended to the eligible small borrowers is as per extant guidelines of RBI
  • Submission of statutory auditor certificate to MLI confirming compliance with the above within 6 months from the date of disbursement of each tranche of loan
  • Submission of statutory auditor certificate stating that the funding is used solely for the sanctioned purpose and accordance with the interest rate capping condition
  • Obtain details of loan assets created on quarterly basis from Management and Chartered Accountant

Eligible NBFC-MFIs / MFIs may contact their Relationship Manager for further details with respect to the Scheme. Please note that the loan will be subject to internal assessment and completion of documentation prescribed by Standard Chartered Bank

Disclaimer:

The Management Committee of CGSMFI fund will have the authority to approve any changes to the structure of the Scheme/ operational guidelines and that the Scheme terms and conditions, including but not limited to, the eligibility criteria, guarantee fee, rate of interest, tenor of loans, etc. are subject to change from time to time. Upon any changes to the Scheme, terms and conditions governing the loans extended by Standard Chartered Bank (the “Bank”) may be amended suitably. Although best effort has been made to provide complete and accurate information relating to the Scheme, the Bank makes no warranties, express or implied, or representations as to the accuracy or completeness of the same on the website. You are advised to read the Scheme operational guidelines, FAQs and any other terms governing the Scheme carefully.

For details of the Scheme, please refer to the link provided here NCGTC Products