₹20,000 crore credit guarantee unveiled
The government announced a ₹20,000 crore (~$2.4B) credit guarantee scheme to revive microfinance lending and ease liquidity for small lenders, effectively backstopping risk to stimulate on‑the‑ground credit flows. That injection creates a window for lenders to scale micro and small‑ticket working‑capital products quickly. (angelone.in)
The Centre launched the Credit Guarantee Scheme for Microfinance Institutions‑2.0 (CGSMFI‑2.0), effective March 20, 2026, with a guarantee cap of ₹20,000 crore and operational window up to June 30, 2026 or until the ₹20,000 crore limit is exhausted. (financialexpress.com ) (financialexpress.com) The National Credit Guarantee Trustee Company (NCGTC) will provide “amount in default” cover tiered by MFI size: 80% for AUM < ₹500 crore, 75% for AUM ₹500–2,000 crore, and 70% for AUM ≥ ₹2,000 crore. (business-standard.com ) (business-standard.com) Eligible Member Lending Institutions (MLIs) include scheduled commercial banks and all‑India financial institutions funding NBFC‑MFIs/MFIs for on‑lending to small borrowers as per the RBI microfinance definition, the scheme permits only incremental fresh lending and caps loan tenors at a maximum of three years (one‑year moratorium plus two years repayment). (financialexpress.com ) (financialexpress.com) The scheme mandates MLIs allocate at least 5% of sanctioned loans to small MFIs and 10% to medium MFIs, sets per‑MFI loan limits (capped at ₹100 crore for small, ₹200 crore for medium and ₹300 crore for large MFIs), requires separate accounts, statutory auditor certificates and quarterly credit‑bureau reporting, and allows claims annually after a one‑year lock‑in with a guarantee fee of 0.5%. (financialexpress.com ) (financialexpress.com) The government estimates the programme can mobilise up to ₹20,000 crore of fresh wholesale funding and benefit roughly 36 lakh microfinance borrowers nationally, a response to a funding squeeze that saw bank funding to small and mid MFIs fall sharply in recent quarters. (psuconnect.in ) (psuconnect.in) Operational conditions—three‑month disbursement timelines, incremental‑use restrictions, segregated accounting, statutory audit evidence, quarterly bureau feeds and annual claim procedures—create an immediate need for automated origination, audit‑grade reporting and fast document verification in MLI‑to‑MFI workflows. (financialexpress.com ) (financialexpress.com) Solifi’s Originations and portfolio modules offer configurable workflows, integrated third‑party APIs, and audit‑compliant reporting to automate fund‑segregation controls and quarterly reporting requirements, while Solifi Document Intelligence claims up to a 70% reduction in document verification time with a built‑in audit trail and human‑in‑the‑loop overrides to support compliance‑sensitive guarantee claims. (solifi.com ) (solifi.com) Recent Solifi customer rollouts for wholesale/ABL and upgrades by specialty lenders demonstrate live implementations that produce end‑to‑end origination velocity, digital processing, and standardized reporting—capabilities MLIs will need to meet the CGSMFI‑2.0 disbursement schedules and ongoing monitoring obligations. (solifi.com ) (solifi.com)
