If you’ve been exploring ways to fund a rural startup in India without putting personal assets at risk, the Credit Guarantee Fund for Micro Units (CGFMU) might be exactly what you need to know about this year.
What is CGFMU?
The Credit Guarantee Fund for Micro Units, operated by NCGTC (National Credit Guarantee Trustee Company Ltd.), is a government-backed scheme that enables banks and lending institutions to offer loans to micro and small enterprises without collateral.
Instead of you providing security, NCGTC guarantees the lender against default risk.
Why It Matters for Rural Women in 2025
Access without collateral: You don’t have to pledge gold, land, or property.
Loan size: Funding is available for loans up to ₹10 lakh.
Wide participation: Multiple banks, NBFCs, and MFIs are registered to provide loans under this scheme.
Encourages new startups: Especially helpful for rural women who may have limited fixed assets.
This is more than a financial product — it’s a systemic shift that lowers the entry barrier for entrepreneurship in rural India.
How the Process Works
- Approach a participating lender.
- Apply for your business loan.
- The lender applies for the CGFMU guarantee while processing your loan application.
- Once approved, you receive the funds without pledging any collateral.
Direct Resource Link
Official scheme details: Credit Guarantee Fund for Micro Units (CGFMU)
Final Insight
In rural entrepreneurship, access to finance is often the first roadblock. With CGFMU, that barrier gets smaller — making 2025 a year where more women can start and scale their ventures without risking their family’s security.
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