MINISTRY OF FINANCE
(Department of Financial Services)
Notification No. S.O. 2668(E), Dated: 01.07.2021
New Delhi,
S.O. 2668(E).—In partial modification to the notification of the Government of India in the Ministry of Finance (Department of Financial Services), number S.O. 1443(E), dated the 18th April, 2016, the Central Government hereby makes the following amendments to the Scheme known as the Credit Guarantee Fund for Micro Units (CGFMU) (hereinafter referred to as the said Scheme), namely:—
1. In the said Scheme, in paragraph 2,—
(a) in sub-paragraph (xi), the brackets and words “(Interest rate as stipulated by Mudra; presently not to exceed 12% p.a.)” shall be omitted;
(b) for sub-paragraph (xii), the following sub-paragraph shall be substituted, namely:—
‘xii. “Eligible borrower” means new or existing micro unit / enterprise falling under any sector covered under PMMY or as defined in the MSMED Act, 2006 (as amended from time to time), who meets eligibility criteria prescribed by the Fund and whose credit requirement does not exceed the specified limit under PMMY. Specified limit of the loan shall be Rs.10 lakh or such other amount as may be decided by the Fund from time to time. Further, Overdraft loan amount of Rs.10,000/- sanctioned under PMJDY accounts shall also be eligible to be covered under Credit guarantee Fund. Eligible borrower would also mean Self Help Groups who meet eligibility criteria prescribed by the Fund and whose loan amount is above Rs.10 lakh and upto Rs.20 lakh.’.
2. In the said Scheme, in the notes to the attachment, after the words and letters “credit management by MLIs”, the following words shall be inserted, namely:—
“This payout cap shall, however, not be applicable on the SHG portfolio.”
3. All other terms and conditions of the said Scheme shall remain unchanged.
[F. No. 21/1/2020/IF-II]
LALIT KUMAR, Economic Adviser
Note: The principal Scheme was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide number S.O. 1443(E), dated the 18th April, 2016 and subsequently amended vide notification number S.O. 1261(E), dated the 16th April, 2020.
Also Read: Credit Guarantee Fund for Micro Units- Overview & Alterations by Management Committee
CGFMU loan cover scheme is very attractive because guarantee fee is very less as compare to CGTMSE.
It will become more helpful to borrower and banker if guarantee cover can extend up to 20.00 lacs