Union Cabinet extends Mudra loan guarantee scheme till March 2031, approves Rs 5,000 crore corpus
New Delhi, November 11: In a major initiative to strengthen financial support for micro-enterprises and promote entrepreneurship, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a five-year extension of the Credit Guarantee Fund for Micro Units (CGFMU) until March 2031.
The Cabinet approved a corpus of Rs 5,000 crore to facilitate credit guarantee support for loans worth approximately Rs 12.6 lakh crore under the Pradhan Mantri Mudra Yojana (PMMY).
Announcing the decision, Union Information and Broadcasting Minister Ashwini Vaishnaw said the extension would continue institutional support for micro-enterprises by providing credit guarantee protection to lending institutions against specified default risks.
The scheme, implemented through the National Credit Guarantee Trustee Company Limited (NCGTC), aims to encourage banks and other eligible financial institutions to extend credit to small entrepreneurs, particularly those facing difficulties in accessing formal financing.
According to official figures, more than 60.36 crore loans involving Rs 43.34 lakh crore had been sanctioned under the Mudra scheme since its launch, as of September 2026.
Introduced in January 2016, CGFMU has played a significant role in expanding institutional lending to micro-businesses, supporting self-employment and promoting grassroots economic activity.
The extension is expected to provide continued financial support to small traders, service providers, manufacturers and aspiring entrepreneurs, including women and young people seeking to establish or expand businesses.
The decision also holds relevance for Jammu and Kashmir, where improved access to institutional credit can encourage entrepreneurship in handicrafts, tourism, small-scale industries and other livelihood-generating sectors.
