Credit Guarantee Scheme for Microfinance Institutions
- Context: The Government of India has extended the validity of the Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0).
- The scheme will remain operational until 31 August 2026 or until guarantees amounting to ₹20,000 crore are issued, whichever occurs earlier.
About CGSMFI-2.0
- The Central Government launched CGSMFI-2.0 on 20 March 2026.
- The scheme provides guarantee cover to Banks and Financial Institutions (FIs) through the National Credit Guarantee Trustee Company Limited (NCGTC).
- The guarantee protects lenders against expected losses on loans provided to Non-Banking Financial Company-Microfinance Institutions (NBFC-MFIs) and MFIs, which subsequently lend to small borrowers.
- Loans worth ₹770 crore have been sanctioned under the scheme so far.
Key Features
- Eligible Borrowers: Small borrowers as defined by the Reserve Bank of India (RBI), including both new and existing customers.
- Guarantee Coverage: 80% for small NBFC-MFIs/MFIs, 75% for medium-sized entities, and 70% for large entities.
- Guarantee Fee: 0.50% per annum on the sanctioned loan amount for the first year, and subsequently on the outstanding loan amount.
About Microfinance
- Microfinance involves providing small-scale loans, savings, and insurance services to individuals and small businesses that lack access to formal banking services.
MSME OSOP Support for Divyangjan Vishwakarma Artisans
- Context: The Ministry of Micro, Small and Medium Enterprises (MSME) has announced the implementation of the ‘One Station One Product’ (OSOP) scheme under the Pradhan Mantri Vishwakarma Yojana to enhance the prosperity of Vishwakarma artisans with disabilities (Divyangjan).
One Station One Product Scheme
- The ‘One District One Product’ (ODOP) scheme was first launched in January 2018.
- The ‘One Station One Product’ scheme is an initiative launched by Indian Railways under the Ministry of Railways to promote the ‘Support for Local Products’ campaign.
- It provides specially designed outlets at railway stations across India, enabling local people to sell their traditional products.
- This initiative was conceptualized by the National Institute of Design, Ahmedabad, with the aim of transforming railway stations into hubs for promoting regional and locally produced goods.
- Its pilot phase commenced on March 25, 2022. It supports the livelihoods of local artisans such as potters, weavers, and tribal communities.
- Under this scheme, eligible applicants are allotted stalls or kiosks on a rotational basis for 15 days upon payment of a ₹1,000 deposit.
- Zonal Railways are responsible for selecting stations, identifying suitable products, and choosing vendors.
Pradhan Mantri Vishwakarma Scheme
- The Pradhan Mantri Vishwakarma Scheme was launched on September 17, 2023.
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- The Pradhan Mantri Vishwakarma Scheme is a Central Sector Scheme implemented by the Ministry of Micro, Small and Medium Enterprises (MSME) to support traditional artisans and craftspeople.
- The scheme focuses on preserving the ‘Guru-Shishya’ (teacher-student) tradition of skill transfer.
- The scheme offers benefits such as skill training, market linkage, and incentives for digital transactions.
- This scheme will be implemented over a period of five years, from 2023-24 to 2027-28.
Eligibility and Scope
- The scheme applies to artisans residing in both rural and urban areas across the country.
- It covers 18 types of traditional trades, including blacksmithing, boat making, and tool making.
- Applicants must be over 18 years of age and currently engaged in a traditional trade; they must not have availed of similar loans in the past five years.
Key Features
- Recognition: Artisans will be provided with a ‘Pradhan Mantri Vishwakarma’ certificate and an identity card.
- Skill Training: Basic training (5–7 days) and advanced training (over 15 days) will be provided; a stipend of ₹500 per day will be given during the training period.
- Toolkit Support: Financial assistance of up to ₹15,000 will be provided through e-vouchers.
- Credit Facility: Collateral-free loan facility; loans totaling up to ₹3 lakh will be provided in two tranches (₹1 lakh + ₹2 lakh) at an interest rate of 5%.
- Target: The scheme aims to benefit 5 lakh families in the first year and a total of 30 lakh families over five years.
