Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) Context: The Government of India has introduced CGSMFI-2.0 with a total corpus of ₹20,000 crore. About CGSMFI-2.0 The scheme aims to offer credit guarantee support to eligible Member Lending Institutions (MLIs) so they can finance NBFC-MFIs and other MFIs, which in turn provide loans to new and existing small borrowers. NBFC-MFI Definition These are non-deposit taking NBFCs that must allocate at least 75% of their assets to microfinance loans, which are collateral-free loans given to households with an annual income of up to ₹3 lakh. Management The scheme is administered by the National Credit Guarantee Trustee Company (NCGTC), which is fully owned by the Department of Financial Services under the Ministry of Finance. Duration It will remain in force until June 2026 or until guarantees worth ₹20,000 crore are issued, whichever comes first. About Microfinance Microfinance involves providing small-scale financial services such as loans, savings, and insurance to individuals and small enterprises who do not have access to formal banking systems. Significance of Microfinance in India Financial Inclusion and Poverty Reduction It bridges the gap left by traditional banking institutions by integrating low-income populations into the formal financial sector. Support to MSMEs and Entrepreneurship It promotes small businesses by offering customized loans without requiring collateral. Women Empowerment Women make up around 95% of borrowers in the microfinance sector, highlighting its role in improving their economic independence (Economic Survey 2025–26). Index of Eight Core Industries Context: The growth rate of the Index of Eight Core Industries (ICI) declined to 2.3% in February (year-on-year), compared to 4.7% in January. The Index of Eight Core Industries (ICI) is released by the Office of Economic Advisor, under the Ministry of Commerce and Industry. Sectors Showing Growth Cement production increased by 9.3% Steel output rose by 7.2%…
