Banks have fully utilized 7,500 crore rupees under the microfinance institutions (MFIs) credit guarantee program for the benefit of the smallest borrower, the finance ministry said on Wednesday.
The program was announced by Finance Minister Nirmala Sitharaman in June as part of a Rs 6.29 lakh crore program aimed at providing relief to various sectors affected by the second wave of the COVID-19 pandemic.
“Credit guarantee for MFIs fully utilized within 75 days. Rs 7,500 cr sanctioned to #IMFs under #CGSMFI for on-lending to small borrowers. Big boost to consumption and livelihoods,” the ministry said in a statement. tweet.
Under this program, loans of up to Rs 1.25 lakh have been provided.
“#CGSMFI supported 92 NBFC-MFIs / MFIs through 20 lenders. MFR-2 and below MFIs received about 45% of the penalty amount at reasonable rates. The program played a catalytic role in facilitating credit to bottom-of-the-pyramid borrowers in these difficult times, he added.
Bank loans are capped at the marginal cost of funds (MCLR) borrowing rate plus 2%. The maximum loan term is three years and 80 percent of the aid must be used by MFIs for additional loans.
Interest rates will be at least 2 percent lower than the maximum rate prescribed by the RBI.
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