Government Financial Schemes
The credit-guarantee and targeted-lending schemes exams ask about — PMMY/MUDRA, Stand-Up India, CGTMSE, PM SVANidhi, KCC and PMEGP — grouped by whether they guarantee a loan, subsidise it, or simply target a borrower group, with a note that ceilings change by notification.
What you will be able to do
- Separate a credit-guarantee scheme from a subsidy scheme from a targeted-credit scheme.
- Match PMMY, Stand-Up India, CGTMSE, PM SVANidhi, KCC and PMEGP to their borrower groups.
- Recall the MUDRA loan tiers by name and rough size.
- Explain why the exact scheme ceilings must be treated as revisable.
What is inside this lesson
- 1Why these schemes exist
- 2Credit-guarantee schemes
- 3PMMY / MUDRA loan tiers
- 4Targeted-credit and subsidy schemes
- 5Common confusions
- 6Quick revision
- 7Practice
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Why these schemes exist
Small borrowers — a street vendor, a first-time entrepreneur, a marginal farmer — are creditworthy in substance but fail a bank's usual tests: no collateral, no credit history, tiny ticket size. Government schemes bridge that gap in one of three ways:
- Guarantee the loan, so the bank can lend without collateral and still be protected against default.
- Subsidise the loan, through a margin-money grant or an interest subvention, so the effective cost to the borrower falls.
- Target a borrower group and set simplified norms, so banks route a defined share of credit to it.
The loan is still made by a bank on its own books; the scheme changes the risk or the price, not the lender.
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