Government launches ₹20,000 crore fund to aid microfinance institutions
Business
The government just rolled out a ₹20,000 crore Credit Guarantee Scheme to help microfinance institutions (MFIs) get easier access to funds.
This move is part of the MFI 2.0 program and is meant to fix the funding slowdown that's been making it tough for smaller MFIs to support their customers.
Loans under this scheme come with capped interest rates
Loans under this scheme come with capped interest rates and can be repaid over three years, with a one-year break before payments start.
There are limits on how much each MFI can borrow, up to 20% of its assets, with extra focus on making sure small and midsize MFIs get a fair share.
The goal? Restore lender confidence and make credit more available for nearly 50 lakh people who've been struggling due to the funding crunch.