Amendments made to the scheme of Credit Guarantee Fund for Micro Units.
S.O. 1361(E).—In partial modification of MINISTRY OF FINANCE (Department of Financial Services) NOTIFICATIONS New Delhi, number S.O. 1443(E) dated the 18th April, 2016, number S.O. 1261(E) dated the 16th April, 2020, number S.O. 2668 (E) dated the 01st July, 2021 and number S.O. 457(E) dated 31st January, 2023 appearing in the Gazette of India: EXTRAORDINARY PART II—Section 3—Sub-section (ii) publishing the Scheme of Credit Guarantee Fund for Micro Units (CGFMU), the Central Government hereby introduces certain changes/alterations which are given in italics & underlined\:
- Paragraph at Serial No.2 (xii) of Chapter I of Notification number S.O. 1443(E) dated the 18th April, 2016, 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.10 lakh 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. - Paragraph at Serial No. 8 (i) (a) of Chapter III of Notification number S.O. 1443(E) dated the 18th April, 2016, shall be read as:
(a) During the base year (year of portfolio built-up) – Guarantee fee shall be paid on the sanctioned amount corresponding to the outstanding balance of the quarterly built up balance of the portfolio of micro loans, including micro unit/enterprise set up under Joint Liability Group (JLG) framework, individually or jointly, for the full year or broken period i.e. till March 31 of the subsequent year, as the case may be, and the Guarantee will be valid upto the end of that financial year. It may be noted that for such sanctioned cases which have been cancelled/repaid/prepaid/taken over during the currency of the portfolio, no guarantee fee shall be charged for such sanctioned cases in the portfolio and no guarantee cover would be applicable. - Paragraph at Serial No. 9 (i) of Chapter IV of Notification number S.O. 1443(E) dated the 18th April, 2016, shall be read as:
(i) In the nature of ‘First Loss Portfolio Guarantee’, wherein first loss to the extent of 3% of the amount in default, will be borne by the MLI and therefore, will be excluded for the claim. Out of the balance portion, the ‘extent of guarantee’ will be to a maximum of 75% of ‘Amount in Default’ in the portfolio or such other percentage as may be specified by the Fund from time to time on a pro-rata basis. The same shall apply for micro unit/enterprise set up under Joint Liability Group (JLG) framework, individually or jointly.
All other terms and conditions of the said Scheme shall remain unchanged.
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