The Union Cabinet has extended the PM Mudra credit guarantee, the Credit Guarantee Fund for Micro Units (CGFMU), for five years until 31 March 2031 with a ₹5,000 crore outlay. The government says the extension is expected to support Mudra loans worth ₹12.6 lakh crore.
The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi on 11 November 2026, and Information and Broadcasting Minister Ashwini Vaishnaw briefed reporters in New Delhi afterwards. The fund backs loans under the Pradhan Mantri Mudra Yojana (PMMY) and applies to the Sixteenth Finance Commission cycle, 2026-27 to 2030-31.
What Does the PM Mudra Credit Guarantee Cover?
According to details reported on 11 November, the guarantee covers PMMY loans up to ₹20 lakh, Pradhan Mantri Jan Dhan Yojana overdrafts up to ₹10,000, and Self Help Group portfolio loans between ₹10 lakh and ₹20 lakh. The National Credit Guarantee Trustee Company Limited (NCGTC) administers the guarantee cover that protects lenders against default risk. The CGFMU was launched in January 2016.
How Big Is the Mudra Scheme Now?
As of September 2026, lending institutions had sanctioned more than 60.36 crore loans worth ₹43.34 lakh crore since PMMY began, according to the figures reported with the Cabinet decision.
What Did the Government Say About the Extension?
An official release stated: “The extension of the CGFMU scheme will enable loans of Rs.12.6 lakh crore over the next five years.” It added that the scheme “will act as a catalyst for young aspiring entrepreneurs to set up and grow their business.”
Market and Trade Reaction
No reaction from banks, industry bodies or economists had been reported in the sources reviewed at the time of writing.
What Happens Next?
The fund will now run until 31 March 2031. The sources reviewed did not give operational guidelines for lenders, such as the date from which the extended cover applies to new loans.
Frequently Asked Questions
Until when has the Credit Guarantee Fund for Micro Units been extended?
The Union Cabinet approved continuing the fund for five years, until 31 March 2031.
How much has the Cabinet approved for the PM Mudra credit guarantee?
The Cabinet approved an outlay of ₹5,000 crore, which is expected to support Mudra loans worth ₹12.6 lakh crore.
Which loans does the guarantee cover?
It covers PMMY loans up to ₹20 lakh, Jan Dhan overdrafts up to ₹10,000 and Self Help Group portfolio loans between ₹10 lakh and ₹20 lakh.
Source: DT Next and News On AIR, 11 November 2026.
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