Micro lenders seek extension of credit guarantee scheme in Union Budget

Seek allocation of Rs 15,000 cr for FY23, of which at least 75% should be earmarked for small and mid-size MFIs

Sa-Dhan, the self-regulatory organisation for Microfinance Institutions (MFIs), has sought an extension of the credit guarantee scheme till the next fiscal year (FY23) with an allocation of Rs 15,000 crore, at least 75 per cent of which should be earmarked for small and mid-size MFIs. This is a part of their recommendation to Finance Minister Nirmala Sitharaman ahead of the upcoming Union Budget.

The finance minister had announced a Rs 7,500 crore credit guarantee scheme for the ongoing fiscal year (FY22) for MFIs as economic relief from the pandemic.

While the credit guarantee scheme has helped MFIs during Covid, the sector is