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The Economic Times

Economy / The Economic Times

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Credit guarantee scheme for MFIs still stuck in low gear

Banks have received an aggregate loan demand of Rs 10,000-12,500 crore under the scheme, according to people familiar with the matter. While the credit guarantee provides 70-80% default coverage, its rigid caps on bank lending rates and strict margin rules for microfinance companies have made it a non-starter so far in terms of loan disbursement, they said.

5 Jun 2026 12:55 am