Credit Guarantee Fund for Micro Units (MUDRA)

Credit Guarantee Fund for Micro Units (CGFMU) was notified by Govt. on 18th April 2016 and has been made effective retrospectively for loans sanctioned with effect from 8th April 2015.

CGFMU or in simple terms Guarantee Fund for Mudra Loans is managed by NCGTC (National Credit Guarantee Trustee Company Limited). The eligibility criteria for Mudra Loans to be covered under CGFMU is given as under:

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Eligibility Criteria for Mudra Loans to be covered under NCGTC or CGFMU:

1. Should be new or existing micro unit (as defined in the MSMED Act, 2006). [Read this article about MSME]
2. Micro Loans extended as per Pradhan Mantri Mudra Yojana.
3. No Collateral security or third party/ies guarantee attached in the Mudra Loan.
4. No Additional cover on micro loans by Govt., General Insurer etc. (For example Mudra Loans already covered under CGTMSE will not be eligible for CGFMU cover).
5. No inconsistency with Law/ any directives or instructions issued by the Central Government or the RBI.
6. Any loan sanctioned not conforming to interest rates as may be prescribed (12% prescribed for Shishu category) will not qualify for guarantee cover.
7. Overdraft of Rs 5, 000/- sanctioned under PMJDY accounts.
8. Amount of First or cumulative disbursement shall not be more than Sanction Amount.
9. Amount of loan sanctioned under:
   1. Shishu Loans: covering loans upto Rs 50,000/-
   2. Kishor Loans: covering loans above Rs  50,000/- and upto  Rs  5 lakh
   3. Tarun Loans : covering loans above Rs  5 lakh and upto  Rs  10 lakh
10. Loan account should be a Standard Account at the time of applying for a guarantee.

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Credit Guarantee Fund for Micro Units for loans already sanctioned (before 1st April 2016) -retrospective portfolio:

1. Mudra Loans sanctioned on or after April 08, 2015 till March 31, 2016 shall be covered.
2. All loan accounts including (NPA accounts) are accepted at the time of applying for a guarantee.

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