CGFMU Scheme amended to include “Tarun Plus” covering loans above 10 lakh upto 20 lakh
In April 2016, Government launched a Scheme called the Credit Guarantee Fund for Micro Units (CGFMU). Under the scheme, subject to the other provisions the Fund undertook, in relation to loans extended to an eligible micro unit by a lending institution to provide guarantee against default in repayment of micro loans extended by the lending institutions.
The various category of “micro loans” eligible under the schemes are as under:
Shishu: covering loans upto 50,000/-
Kishor: covering loans above 50,000/- and upto 5 lakh
Tarun: covering loans above 5 lakh and upto 10 lakh
Govt. has issued Notification S.O. 4658(E) dated 24.10.2024 amended the said scheme by bringing within the definition of “Micro Loans” a new category called “Tarun Plus” covering loans above 10 lakh and upto 20 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.
Further, Overdraft facility of Rs.10,000/- sanctioned under PMJDY accounts shall also be eligible to be covered under Credit guarantee Fund.
Further the definition of “Eligible borrower” has been modified and shall be read as:
Eligible borrower” means new or existing micro unit / enterprise, including micro unit/enterprise set up under Joint Liability Group (JLG) framework, individually or jointly (irrespective of the availability of guarantee under JLG), falling under any sector covered under PMMY or as defined in the MSMED Act, 2006 (as amended from time to time), who meets eligibility criteria prescribed by the Fund and whose credit requirement does not exceed the specified limit under PMMY. Specified limit of the loan shall be Rs. 20 lakh as defined above or such other amount as may be decided by the Fund from time to time. Further, Overdraft loan amount of Rs.10,000/- sanctioned under PMJDY accounts shall also be eligible to be covered under Credit guarantee Fund. Eligible borrower would also mean Self Help Groups who meet eligibility criteria prescribed by the Fund and whose loan amount is above Rs.10 lakh and upto Rs.20 lakh.
Also, the paragraph 4 related to Micro loans eligible under the Scheme been amended as under:
The Fund shall cover micro loans upto the specified limit (currently Rs.20 lakh) extended by Member Lending Institution(s) to an eligible borrower, provided that the lending institution applies for guarantee cover in respect of such loans so sanctioned within such time period and as per procedures prescribed by the Fund for the purpose. Further, Overdraft loan amount of Rs.10,000/- sanctioned under PMJDY accounts shall also be eligible to be covered under Credit guarantee Fund. Micro loans under PMMY inclusive of overdraft under PMJDY, sanctioned since 8th April 2015 would qualify for guarantee cover under the scheme. The Fund may, at its discretion, approve/frame a list of Member Lending Institutions and /or their schemes, for which the guarantee cover will be available, or a negative list for which the guarantee cover shall not be available
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