On 11 November 2026 the Union Cabinet, chaired by the Prime Minister, took two linked decisions on small-business credit. It approved the continuation of the Stand-Up India Scheme for five years, up to 31 March 2031, and it approved the continuation of the Credit Guarantee Fund for Micro Units (CGFMU) for the same period.
Both schemes tackle the same problem: a first-time entrepreneur with a good idea but no collateral is a risky customer for a bank. Stand-Up India serves the entrepreneur who needs a mid-sized loan, between ₹10 lakh and ₹1 crore. CGFMU stands behind the much smaller Mudra loans. Together they cover most of the lending ladder for a new business.
Stand-Up India: what it is
Stand-Up India was launched on 5 April 2016 to promote entrepreneurship among women, Scheduled Castes (SC) and Scheduled Tribes (ST). Its core promise is that every bank branch should lend to at least one SC or ST borrower and at least one woman borrower for a new business.
| Feature | Detail |
|---|---|
| Eligible borrowers | Women, SC and ST entrepreneurs setting up new (greenfield) enterprises |
| Loan size | Composite (working capital plus term loan) or term loan, above ₹10 lakh and up to ₹1 crore |
| Share of project cost | Up to 85% |
| Sectors | Manufacturing, services, trading and agriculture-allied activities |
| Credit guarantee cover | 85% of the loan amount |
| Guarantee fee | Standard 0.50% |
Greenfield means the borrower's first venture in that line. PIB's 2023 explainer on the scheme adds some conditions: the applicant must be above 18, must not be in default to any bank, and in a non-individual enterprise 51% of the shareholding and control must be with SC, ST or women entrepreneurs. The borrower brings at least 10% of the project cost as own money, and up to 15% margin money can come from other central or state schemes. Applications go through a bank branch, the Stand-Up Mitra portal, which was built by SIDBI, or the Lead District Manager.
One point is easy to miss: the Government does not allocate loan funds to this scheme. The loans come from the lending institutions; the Government's contribution is the guarantee corpus, released to the National Credit Guarantee Trustee Company (NCGTC). Up to November 2021 it had released ₹1,100 crore towards the Credit Guarantee Fund for Stand-Up India. The new decision approves a credit guarantee corpus of ₹4,111 crore.
What the extension changes
- Duration: five years, up to 31 March 2031. The earlier extension ran only to 2025, according to a 2023 PIB note.
- Target: financial help to an additional 2.5 lakh entrepreneurs over the five years.
- Track record: loans to more than 2.75 lakh women, SC and ST entrepreneurs since April 2016.
- Money: a guarantee corpus of ₹4,111 crore, with 85% guarantee cover.
A quick calculation (by The Cavalier) shows how ambitious the target is. Since April 2016, about 10 years and 7 months, the scheme has reached roughly 2.75 lakh entrepreneurs, or about 26,000 a year. The new target of 2.5 lakh in five years is 50,000 a year, nearly double the historical pace.
Ten years of numbers
PIB's anniversary notes give a clear picture of growth.
| Date | Amount sanctioned | Accounts |
|---|---|---|
| 5 years (April 2021) | ₹25,586 crore | 1,14,322 |
| 6 years (April 2022) | ₹30,160 crore | 1,33,995 |
| 7 years (April 2023) | ₹40,700 crore | 1,80,630 |
| 17 March 2025 | ₹61,020 crore | not stated |
The category breakdown for November 2024 (from the nine-year note) was: SC, 46,248 accounts and ₹9,747 crore; ST, 15,228 accounts and ₹3,244 crore; women, 1,90,844 accounts and ₹43,984 crore. The 2023 figures show these groups do not overlap in the count, so they add up to the total of about 2.52 lakh accounts and ₹56,975 crore. That gives an average loan of about ₹22.6 lakh, and women's share of accounts at about 76%, a little lower than the roughly 80% in March 2023 (calculated by The Cavalier).
The companion: Credit Guarantee Fund for Micro Units
CGFMU was launched in January 2016 to give lenders a guarantee against default on small loans. It operates through the NCGTC, a wholly owned Government of India company that runs several guarantee funds. The Cabinet has now continued it to 31 March 2031, with a corpus of ₹5,000 crore.
What it covers:
- Loans to micro enterprises under the Pradhan Mantri Mudra Yojana (PMMY) up to ₹20 lakh.
- Overdrafts of up to ₹10,000 given by banks on Pradhan Mantri Jan Dhan Yojana accounts.
- Loans to Self Help Groups where the portfolio is between ₹10 lakh and ₹20 lakh.
What changes:
- Guarantee fee falls from 1% a year to 0.75% a year. For Self Help Groups it stays at 0.25% in the first year and 0.50% after that.
- Cover is tied to the amount actually disbursed for working-capital limits and to the outstanding balance for term loans, so that it follows the lender's real exposure.
- The fund will apply to all PMMY loans in the Sixteenth Finance Commission cycle, FY 2026-27 to FY 2030-31.
The Government expects the fund to enable PMMY loans of about ₹12.6 lakh crore over five years. Set against a ₹5,000 crore corpus, that is about 250 times the corpus (calculated by The Cavalier). This is possible because a guarantee fund pays only if borrowers default, and defaults are a fraction of all loans. Our report on how a credit guarantee works explains the arithmetic for a different scheme using the same company.
Mudra: the loans behind the guarantee
PM Mudra Yojana was launched on 8 April 2015. It offers collateral-free loans for non-corporate, non-farm income-generating activities, through banks, non-banking finance companies and micro-finance institutions. The PIB release of November 2026 says that by September 2026, lenders had sanctioned more than 60.36 crore loans worth ₹43.34 lakh crore.
Six months earlier, on 27 March 2026, the figures were 57.79 crore loans and ₹40.07 lakh crore. So in about six months, around 2.6 crore loans and ₹3.3 lakh crore were added (calculated by The Cavalier). The average Mudra loan works out to about ₹72,000, which is about a thirtieth of the average Stand-Up India loan.
Mudra loans are grouped into four stages of growth:
| Category | Loan size |
|---|---|
| Shishu | Up to ₹50,000 |
| Kishor | Above ₹50,000 and up to ₹5 lakh |
| Tarun | Above ₹5 lakh and up to ₹10 lakh |
| Tarun Plus | Above ₹10 lakh and up to ₹20 lakh |
Tarun Plus was added in October 2024, after the Union Budget of 23 July 2024 raised the Mudra ceiling from ₹10 lakh to ₹20 lakh. It is open to those who have taken and repaid an earlier Tarun loan, and its guarantee comes from CGFMU. In the April 2026 PIB summary about 74% of Mudra loans by number were Shishu, though they were about 32% of the amount. Two-thirds of loans went to women, and around one-fifth to first-time entrepreneurs.
Two schemes, one ladder
| Mudra (with CGFMU) | Stand-Up India | |
|---|---|---|
| Who | Non-corporate, non-farm micro businesses (anyone eligible) | Women, SC and ST entrepreneurs |
| Loan size | Up to ₹20 lakh | Above ₹10 lakh and up to ₹1 crore |
| New or existing business | Both | New (greenfield) only |
| Guarantee | CGFMU, fee 0.75% a year | Credit guarantee, 85% cover, fee 0.50% |
| Guarantee run by | NCGTC | NCGTC |
The ₹10–20 lakh band overlaps, so a woman entrepreneur starting a new business can approach either. Below it, Mudra is the natural route; above it, Stand-Up India is the only one of the two that applies. Neither scheme is a grant or a subsidy. Both are loans from banks, and the Government's role is to share the risk.
Why a guarantee matters is easy to see from the lender's side. A branch manager looking at a first-time borrower with no property to pledge has two choices: refuse, or lend and carry the whole risk. A credit guarantee changes that choice. The lender pays a small annual fee, and if the loan goes bad, the guarantee trust reimburses a large part of the loss. The borrower, in turn, does not have to put up collateral. That is why both decisions came as a pair: without the guarantee corpus, the lending targets would depend entirely on bankers' willingness to take risk. The fee is also a design lever. A lower fee, as with CGFMU, makes the scheme more attractive to lenders; a higher guarantee percentage, as with Stand-Up India's 85%, makes larger loans easier to sanction.
For the wider setting, see our notes on MSME definitions and schemes and on the banking sector.
What to watch
- The pace. Doubling annual reach from about 26,000 to 50,000 entrepreneurs will need more branch-level push, since Stand-Up India depends on banks choosing to lend.
- Women's share. It has slipped from about 80% to about 76% of accounts between March 2023 and November 2024; the extension keeps the target group the same.
- Greenfield restriction. The scheme helps only new ventures, so an owner who wants to expand an existing business has to look to other schemes.
- Defaults. A guarantee fund's strength depends on the loss record. The fee cut under CGFMU makes loans cheaper for lenders, but also reduces the fund's income.
🔑 Revision block
Decisions. Cabinet, 11 November 2026: Stand-Up India continued for five years, up to 31 March 2031; CGFMU continued to 31 March 2031.
Stand-Up India. Launched 5 April 2016; women, SC, ST; greenfield enterprises; loans above ₹10 lakh up to ₹1 crore (up to 85% of project cost); 85% guarantee cover; fee 0.50%; new corpus ₹4,111 crore; target 2.5 lakh more entrepreneurs; 2.75 lakh+ helped since 2016. Portal: Stand-Up Mitra (SIDBI).
CGFMU. Launched January 2016; run through NCGTC; covers PMMY loans up to ₹20 lakh, Jan Dhan overdrafts up to ₹10,000 and SHG loans of ₹10–20 lakh; fee cut 1% to 0.75% (SHG unchanged at 0.25% then 0.50%); corpus ₹5,000 crore; enables about ₹12.6 lakh crore of loans over five years.
Mudra. Launched 8 April 2015; Shishu up to ₹50,000, Kishor to ₹5 lakh, Tarun to ₹10 lakh, Tarun Plus to ₹20 lakh; 60.36 crore loans, ₹43.34 lakh crore by September 2026.
Link to the Finance Commission. Both continued over FY 2026-27 to FY 2030-31, the Sixteenth Finance Commission cycle.
🎯 Practice MCQs
Q1. The Cabinet has approved continuation of the Stand-Up India Scheme up to:
(a) 31 March 2028
(b) 31 March 2029
(c) 31 March 2031
(d) 31 March 2036
→ (c)
The continuation is for five years, up to 31 March 2031.
Q2. Stand-Up India provides loans mainly to:
(a) Women, SC and ST entrepreneurs setting up new enterprises, with loans above ₹10 lakh and up to ₹1 crore
(b) All micro and small enterprises, with loans up to ₹10 lakh
(c) Farmers only, for crop loans up to ₹3 lakh
(d) Start-ups recognised by DPIIT, through equity up to ₹1 crore
→ (a)
The scheme is for greenfield ventures of women, SC and ST entrepreneurs. Option (b) is closer to the lower Mudra bands.
Q3. The credit guarantee cover under the continued Stand-Up India Scheme is:
(a) 50% of the loan amount
(b) 75% of the loan amount
(c) 85% of the loan amount
(d) 100% of the loan amount
→ (c)
The release gives 85% guarantee cover and a standard guarantee fee of 0.50%.
Q4. The Credit Guarantee Fund for Micro Units provides its guarantee to lending institutions through the:
(a) Small Industries Development Bank of India
(b) Reserve Bank of India
(c) Securities and Exchange Board of India
(d) National Credit Guarantee Trustee Company Limited
→ (d)
NCGTC runs the fund. SIDBI built the Stand-Up Mitra portal but does not run the guarantee.
Q5. Under the Pradhan Mantri Mudra Yojana, a 'Tarun Plus' loan covers amounts:
(a) Up to ₹50,000
(b) Above ₹10 lakh and up to ₹20 lakh
(c) Above ₹20 lakh and up to ₹50 lakh
(d) Above ₹50 lakh
→ (b)
Tarun Plus was added in October 2024 for repeat borrowers after the Mudra ceiling was raised from ₹10 lakh to ₹20 lakh.
Q6. The Stand-Up India Scheme was launched on:
(a) 8 April 2015
(b) 5 April 2016
(c) 15 August 2016
(d) 1 February 2017
→ (b)
It was launched on 5 April 2016. 8 April 2015 is the launch date of the Mudra Yojana.
Q7. Consider the following statements:
1. CGFMU guarantees PM Mudra Yojana loans up to ₹20 lakh.
2. Under Stand-Up India, the Government releases the loan amount directly to borrowers from the Budget.
Which of the statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
→ (a)
Statement 2 is wrong: the loans come from lending institutions, and the Government funds only the guarantee corpus.
Q8. The Cabinet approved a credit guarantee corpus for the continuation of Stand-Up India of:
(a) ₹1,100 crore
(b) ₹2,500 crore
(c) ₹3,500 crore
(d) ₹4,111 crore
→ (d)
The corpus is ₹4,111 crore. ₹1,100 crore was the amount released to the earlier guarantee fund up to November 2021.
📋 How this gets asked (PYQ pattern)
Questions on small-business credit are asked in three ways.
The first is scheme identification: which scheme serves whom. The usual trap is mixing Mudra (non-corporate, non-farm, up to ₹20 lakh) with Stand-Up India (women, SC, ST, greenfield, ₹10 lakh to ₹1 crore) and Start-up India (DPIIT-recognised start-ups).
The second is mechanism: what a credit guarantee is, who bears the risk, and which institution runs it. Know that the guarantee protects the lender, not the borrower, and that NCGTC is the trustee company.
The third is numbers and dates: launch dates, loan bands and fees. The fresh hooks this cycle are 31 March 2031, ₹4,111 crore, ₹5,000 crore, 85% cover, the fee cut from 1% to 0.75%, and the Tarun Plus band.
Preparing for CDS? Revise the lending ladder using our notes on MSME definitions and schemes and the banking sector. Follow the daily CDS current affairs, and learn with experienced faculty in the upcoming Cavalier courses in Delhi.
Source: PIB / Cabinet, "Cabinet approves Continuation of Stand-Up India Scheme" and "Cabinet approves continuation of Credit Guarantee Fund for Micro Units", both 11 November 2026; Ministry of Finance releases of 4 April 2021, 5 April 2022, 5 April 2023, 5 April 2025, 8 April 2026, 25 October 2024 and 30 November 2021. Pace, averages and ratios were calculated by The Cavalier from the published figures.
✍️ Written by Aditya Tiwari — Economy & current-affairs faculty at The Cavalier. Reviewed by the Cavalier Faculty Desk.