PM Mudra Scheme: Credit Guarantee Fund Extended Till 2031, ₹5,000 Crore Corpus Approved

Why in the News?

The Union Cabinet chaired by Prime Minister Narendra Modi approved the extension of the **Credit Guarantee Fund for Micro Units (CGFMU)** under the flagship **Pradhan Mantri Mudra Yojana (PMMY)** for five years until **March 31, 2031**.

Union Minister Ashwini Vaishnaw briefed that the Cabinet cleared a **₹5,000 crore corpus** to back collateral-free micro-financing.

Key Features / Major Points:

- Outlay & Credit Impact:

- The ₹5,000 crore corpus will facilitate new loans amounting to **₹12.6 lakh crore ($12.6 trillion)** over the 16th Finance Commission cycle (2026–27 to 2030–31).

- Reduction in Guarantee Fee:

- To lower borrowing friction, the annual guarantee fee charged to lending institutions has been reduced from **1% to 0.75% per annum**.

- (Guarantee fee for Self Help Groups remains unchanged at 0.25% for 1st year and 0.50% subsequently).

- Historical Cumulative Achievements:

- As of September 2026, over **60.36 crore loans** totaling **₹43.34 lakh crore** have been sanctioned since the inception of PMMY.

- Guarantee Scheme Operations:

- Managed by the **National Credit Guarantee Trustee Company Limited (NCGTC)**, providing risk cover against defaults.

- Covers Mudra loans up to ₹20 lakh, PMJDY overdrafts up to ₹10,000, and eligible SHG loans between ₹10 lakh and ₹20 lakh.

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Static GK Facts:

- Pradhan Mantri MUDRA Yojana (PMMY):

- Launched: **April 8, 2015** | Primary Agency: **MUDRA Ltd.**

- Loan Categories: Shishu (up to ₹50,000), Kishore (₹50,000 to ₹5 lakh), and Tarun/Tarun Plus (₹5 lakh to ₹20 lakh).

- Credit Guarantee Fund for Micro Units (CGFMU):

- Launched: **January 2016** | Trustee: **NCGTC**.

One-Liner Quiz (All Competitive Exams):

Q: Up to which date has the Credit Guarantee Fund for Micro Units (CGFMU) under PMMY been extended?

A: March 31, 2031

Q: What is the newly approved corpus amount to facilitate ₹12.6 lakh crore Mudra loans over the next 5 years?

A: ₹5,000 crore

Q: What is the revised annual guarantee fee for lenders under the extended CGFMU scheme?

A: 0.75% per annum (reduced from 1%)

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