Mudra loan guarantee fee cut to 0.75%, scheme extended till 2031
BusinessLine 7 hrs ago·11 Nov 2026, 10:45 am
The government has slashed the guarantee fee for Mudra loans to 0.75% and extended the Pradhan Mantri Mudra Yojana (PMMY) until 2031. This scheme provides credit support to micro enterprises, and the fee reduction is designed to lower the cost of borrowing for small business owners.
For investors, this move is significant as it aims to expand formal credit access for the country's vast micro-enterprise sector. By encouraging financial institutions to lend more easily, the policy could stimulate economic activity and support the growth of small businesses.
Investors should watch how this policy impacts lending volumes and the broader financial sector. A successful rollout could boost the economy, while any implementation challenges might limit the intended benefits.
Excerpt from BusinessLine
The changes are aimed at lowering borrowing costs, expanding formal credit access and encouraging financial institutions to lend to micro enterprises. The Union Cabinet on Wednesday approved the continuation of the Credit Guarantee Fund for Micro Units (CGFMU) for another five years till March 31, 2031, with a corpus…Read the original at BusinessLine
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