Credit Guarantee Fund of MUDRA
Q. Which of the following statements is/are correct about Micro Units Development Refinance Agency (MUDRA)?
1. CGF(Credit Guarantee Fund) is expected to guarantee more than 1,00,000 crore rupees worth of loans to micro and small units in the first instance.
2. It will reduce the credit risk to Banks and other financial intermediaries.- Published on 08 Jan 16a. Only 1
b. Only 2
c. Both
d. None
ANSWER: Both
- The fund is expected to guarantee more than Rs 1 lakh crore worth of loans to micro and small units. Finance Minister Arun Jaitley said the MUDRA scheme has 1.73 crore beneficiaries.
- The features of the scheme include establishment of Credit Guarantee Fund for MUDRA Units (CGFMU) for guaranteeing loans sanctioned under Pradhan Mantri Mudra Yojana with effect from April, 2015 with the objective to reduce the credit risk to banks, NBFCs, MFIs and other financial intermediaries, who are member lending institutions (MLIs).
- The National Credit Guarantee Trustee Company Ltd. (NCGTC Ltd.), a wholly owned company of Government of India, constituted under the Companies Act, 1956 (2013) to manage and operate various credit guarantee funds, will be the trustee of the Fund.
- The guarantee would be provided on portfolio basis to a maximum extent of 50% of amount in default in the portfolio.
