The scheme aims to facilitate credit flow of up to ₹20,000 crore and will cover on-lending to eligible small borrowers, both new and existing.
Under the framework, the guarantee cover will be 80% for small MFIs, 75% for medium MFIs and 70% for large MFIs.
The guarantee fee has been set at 0.50%, while lending rates are capped at EBLR or MCLR plus 2%. On-lending rates are capped at 1% below the average lending rate of the past six months.
The scheme will remain valid until June 30, 2026, or until the ₹20,000 crore limit is fully utilised.
Brokerage firm IIFL said that the scheme’s corpus of ₹20,000 crore is significantly higher than the ₹7,500 crore allocated under the 2021 version.
However, it added that the ₹300 crore cap per MFI is unlikely to be material for larger MFIs.
The brokerage also said that improved funding access for smaller NBFC-MFIs could weigh on market share gains for well-capitalised lenders such as CreditAccess Grameen and L&T Finance.
It further said that cheaper funding under CGSMFI 2.0 could be negative for NBFCs like Northern Arc and MAS Financial Services, which lend to these MFIs.
