Cabinet approves extending credit guarantee fund for micro units, and Stand up India scheme; Aqua Line metro rail corridors extension gets nod

The union cabinet approved extending the Credit Guarantee Fund for Micro Units, and Stand-Up India scheme for five years till 2031. An 8.5 kilometre extension of Aqua Line Metro Rail Corridor from Noida Sector-51 to Greater Noida Sector-04 also got the nod.

Announcing the decisions, union Information Broadcasting minister Ashwini Vaishnaw said the cabinet approved a Rs 5,000 crore corpus for the micro units fund and a Rs 4,111 crore credit guarantee corpus for Stand-Up India.

“Several changes have been made, such as reducing the guarantee fee to lower costs and ensuring an increase in the total amount of credit available,” he said.


An official statement said the micro units fund’s extension is expected to facilitate Rs 12.6 lakh crore in loans under the Pradhan Mantri Mudra Yojana over the next five years. It provides lending institutions protection against default risk through the National Credit Guarantee Trustee Company Limited.

Eligible credit facilities include Mudra loans of up to Rs 20 lakh to micro enterprises, overdrafts of up to Rs 10,000 under Pradhan Mantri Jan Dhan Yojana accounts and specified self-help group loans between Rs 10 lakh and Rs 20 lakh.

“The annual guarantee fee will be reduced from 1% to 0.75%. Self-help groups will continue paying 0.25% in the first year and 0.50% in subsequent years. Coverage will reflect lenders’ actual risk exposure, based on disbursements for working capital and outstanding amounts for term loans,” the statement said.

Stand-Up India’s continuation targets at least 2.5 lakh additional women, Scheduled Caste and Scheduled Tribe entrepreneurs over five years. Since its launch in April 2016, the scheme has facilitated loans to more than 2.75 lakh entrepreneurs from these groups.

Eligible borrowers can obtain loans above Rs 10 lakh and up to Rs 1 crore to establish new enterprises in manufacturing, services, trading and agriculture-allied activities. Support can comprise a term loan or a composite loan combining working capital and term finance, covering up to 85% of project costs.

Credit guarantee coverage under Stand-Up India will be 85% of the loan amount, with a standard guarantee fee of 0.50%.

The extension of Aqua Line Metro Rail Corridor from Noida Sector-51 to Greater Noida Sector-04 of Noida Metro Rail Project will have 5 elevated stations. “On operationalization of this corridor, Noida and Greater Noida city will have 71.878 km of active Metro Rail Network,” another statement said.

This new metro line is aimed at “significantly improving public transportation in the Noida and Greater Noida city, which currently lack efficient connectivity and also it will also provide direct connectivity with high demand corridors, including interchange at Noida Sector-61 Blue Line,” the statement added.