Cabinet approves creation of a Credit Guarantee Fund for MUDRA loans – A boost to refinance operations

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....abinet approves creation of a Credit Guarantee Fund for MUDRA loans – A boost to refinance operations <br>News and Press Release<br>Dated:- 6-1-2016<br><BR>The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has given its approval for the creation of a Credit Guarantee Fund for Micro Units Development Refinance Agency (MUDRA) loans and to convert MUDRA Ltd. into MUDRA Small Indus....

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....tries Development Bank of India (SIDBI) Bank as a wholly owned subsidiary of SIDBI. The Fund is expected to guarantee more than &#8377; 1,00,000 crore worth of loans to micro and small units in the first instance. The salient features of the scheme are as follows: (i) Establishment of Credit Guarantee Fund for MUDRA Units(CGFMU) for guaranteeing loans sanctioned under Pradhan Mantri Mudra Yoja....

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....na with effect from 8th April, 2015 with the objective to reduce the credit risk to Banks / NBFCs / MFIs / other financial intermediaries, who are Member Lending Institutions (MLIs). (ii) The National Credit Guarantee Trustee Company Ltd. (NCGTC Ltd.), a wholly-owned company of Government of India, constituted under the Companies Act, 1956 (2013) to manage and operate various credit guarantee fu....

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....nds, shall be the Trustee of the Fund. (iii) The guarantee would be provided on portfolio basis to a maximum extent of 50% of Amount in Default in the portfolio. The MUDRA (SIDBI) Bank will undertake refinance operations and provide support services with focus on portal management; data analysis etc. apart from any other activity entrusted/ advised by Government of India. Background: MUDRA Ba....

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....nk and a Credit Guarantee Fund was proposed to be set up with a refinance corpus of &#8377; 20,000 crore and a corpus of &#8377; 3,000 crore respectively as per the Budget Speech for 2015-16. As a precursor to the launch of the Pradhan Mantri MUDRA Yojana (PMMY) in April, 2015, MUDRA Ltd. was set up as a corporate subsidiary of SIDBI in March, 2015. The RBI has allocated &#8377; 20,000 crore and t....

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....he first tranche' of &#8377; 5000 crore has been received by MUDRA as refinance.<BR> News - Press release - PIB....