Rs 45,000 crores Partial credit guarantee Scheme 2.0 for Liabilities of NBFCs/MFIs
Existing Partial Credit Guarantee scheme is being revamped and now will be extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 percent first loss sovereign guarantee to Public Sector Banks.
NBFCs, HFCs and MFIs with low credit rating require liquidity to do fresh lending to MSMEs and individuals
• Existing PCGS scheme to be extended to cover borrowings such as primary issuance of Bonds/ CPs (liability side of balance sheets) of such entities
• First 20% of loss will be borne by the Guarantor ie. Government of India.
• AA paper and below including unrated paper eligible for investment (esp. relevant for many MFIs)
• This scheme will result in liquidity of Rs 45,000 crores