Stand-Up India and Mudra Credit Guarantee Schemes Extended Till 2031
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NEW DELHI, November 12, 2026: The Union Government has approved a five-year extension of the Stand-Up India Scheme and the Credit Guarantee Fund for Micro Units (CGFMU) under the Pradhan Mantri Mudra Yojana (PMMY), providing fresh support to entrepreneurs, women-led businesses and small enterprises across India.
The decision was taken at a Union Cabinet meeting chaired by Prime Minister Narendra Modi on November 11, 2026.
Both arrangements will continue until March 31, 2031. The government has approved a combined credit guarantee corpus of ₹9,111 crore, comprising ₹4,111 crore for Stand-Up India and ₹5,000 crore for the Credit Guarantee Fund for Micro Units.
The move aims to improve access to institutional credit, encourage entrepreneurship and support small businesses that often face difficulties in obtaining formal financing
Stand-Up India Scheme Extended for Five Years
The Union Cabinet has approved the continuation of the Stand-Up India Scheme until March 31, 2031.
The scheme focuses on promoting entrepreneurship among women and individuals belonging to Scheduled Castes (SC) and Scheduled Tribes (ST).
The government has set a target of providing financial assistance to at least 2.5 lakh additional entrepreneurs over the next five years.
Launched in April 2016, the scheme has facilitated loans to more than 2.75 lakh women, SC and ST entrepreneurs, according to official government figures.
How Much Loan Can Entrepreneurs Get?
Under the Stand-Up India Scheme, eligible borrowers can obtain loans above ₹10 lakh and up to ₹1 crore for establishing new Greenfield enterprises.
The scheme covers several business sectors, including:
- Manufacturing
- Services
- Trading
- Agriculture-allied activities
Loans can be provided as term loans or composite loans combining working capital and term finance.
Eligible borrowers can receive financing covering up to 85 per cent of the project cost, subject to the scheme’s conditions.
₹4,111 Crore Credit Guarantee Corpus Approved
The government has approved a credit guarantee corpus of ₹4,111 crore for the continuation of Stand-Up India.
The scheme provides credit guarantee coverage of up to 85 per cent of the loan amount, with a standard guarantee fee of 0.50 per cent.
The guarantee mechanism is designed to reduce the lending risk for financial institutions and improve access to institutional credit for eligible entrepreneurs.
Mudra-Linked Credit Guarantee Fund Extended Till 2031
Alongside Stand-Up India, the Cabinet has approved the continuation of the Credit Guarantee Fund for Micro Units (CGFMU) for another five years.
The fund will continue until March 31, 2031, with an approved corpus of ₹5,000 crore.
According to the government, this extension is expected to facilitate approximately ₹12.60 lakh crore in loans under the Pradhan Mantri Mudra Yojana over the next five years.
The CGFMU provides credit guarantee coverage to lending institutions through the National Credit Guarantee Trustee Company Limited (NCGTC).
It helps financial institutions manage default-related risks when extending eligible loans to micro enterprises.
Mudra Loans Eligible for Credit Guarantee Support
Under the continued framework, eligible micro enterprises can receive credit guarantee coverage for PMMY loans of up to ₹20 lakh.
The fund also covers certain other eligible credit facilities, including:
- Overdraft facilities of up to ₹10,000 under Pradhan Mantri Jan Dhan Yojana accounts.
- Eligible Self Help Group loans with portfolios ranging from ₹10 lakh to ₹20 lakh.
The availability and approval of loans remain subject to the applicable eligibility conditions and assessment by lending institutions.
Annual Guarantee Fee Reduced to 0.75 Per Cent
One of the important changes approved by the Cabinet concerns the annual guarantee fee under the CGFMU framework.
The fee has been reduced from 1 per cent to 0.75 per cent per annum.
The reduction is intended to lower the cost associated with credit guarantee coverage and encourage financial institutions to extend more loans to eligible micro enterprises.
The existing guarantee fee structure for Self Help Group loans will remain unchanged.
Mudra Yojana Performance: More Than 60 Crore Loans Sanctioned
According to official government data, more than 60.36 crore loans amounting to ₹43.34 lakh crore had been sanctioned under the Pradhan Mantri Mudra Yojana by September 2026.
These figures represent cumulative loan sanctions since the launch of the scheme.
The government expects the continued credit guarantee framework to support further lending to small businesses during the next five years.
Who Could Benefit From the Government’s Decision?
The extension is expected to support different categories of entrepreneurs and small businesses.
Potential beneficiaries include:
- Women planning to establish new enterprises.
- SC and ST entrepreneurs.
- Small shop owners and traders.
- Micro manufacturing businesses.
- Service-sector entrepreneurs.
- Small business owners seeking formal banking finance.
- Eligible micro enterprises seeking collateral-free credit.
While Stand-Up India specifically focuses on women and SC/ST entrepreneurs establishing Greenfield enterprises, the Mudra-linked guarantee framework supports a wider range of eligible micro enterprises.
Conclusion
The Union Cabinet’s decision to extend the Stand-Up India Scheme and the Mudra-linked Credit Guarantee Fund until March 31, 2031, represents an important development for India’s small-business financing ecosystem.
With a combined corpus of ₹9,111 crore and an expected ₹12.60 lakh crore in Mudra-linked loans over five years, the government aims to strengthen institutional credit access, support entrepreneurship and encourage the growth of micro enterprises.
Disclaimer: This article is based on official Union Cabinet and Press Information Bureau announcements dated November 11, 2026. Loan approvals remain subject to the applicable scheme guidelines, borrower eligibility and lending institution requirements.
