Business
Govt clears Rs 20,000 crore credit guarantee scheme for MFIs; funding access in focus – The Times of India
The government has approved a limited-period Rs 20,000-crore credit guarantee scheme aimed at easing fund flow constraints faced by microfinance institutions (MFIs), according to a PTI report.The Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) will cover loans disbursed by member lending institutions (MLIs), including banks and other lenders, to non-banking finance company-MFIs and MFIs till the end of June, government-run National Credit Guarantee Trustee Company (NCGTC) said in a circular.MFIs, which largely cater to borrowers at the bottom of the economic pyramid, have been facing challenging conditions due to a rise in non-performing assets (NPAs), making lenders cautious about extending fresh exposure.According to the circular, MLIs will extend funding to MFIs or NBFC-MFIs based on their internal assessment for onward lending to eligible small borrowers. Certain conditions have also been prescribed on lending rates.To qualify for benefits under the scheme, the interest rate on loans sanctioned by MLIs to NBFC-MFIs/MFIs will be capped at the External Benchmark Lending Rate (EBLR) or the one-year marginal cost of funds-based lending rate plus two per cent.In addition, MFIs will have to lend to small borrowers at a cost at least one per cent below the average lending rate charged during the previous six months.The scheme also stipulates a maximum loan tenure of three years, including a one-year moratorium followed by a two-year repayment period. Further, MLIs are required to ensure that at least five per cent of the total loan amount under the scheme is sanctioned to small MFIs with assets under management (AUM) of less than Rs 500 crore, while 10 per cent should be allocated to mid-sized institutions with AUM between Rs 500 crore and Rs 2,000 crore.“The maximum amount of loan which can be sanctioned by MLIs to NBFC- MFIs/MFIs shall be capped at 20 per cent of AUM of respective NBFC-MFI/MFI subject to a maximum of Rs 100 crore to small size, Rs 200 crore to medium size and Rs 300 crore to large size NBFC-MFIs/MFIs,” the circular said.Microfinance Institutions Network (MFIN), the industry’s self-regulatory body, welcomed the measure, calling it a timely intervention that could help improve liquidity conditions.“The sector has demonstrated strong improvement in credit quality and adherence to responsible lending practices. The key constraint has been the availability of bank funding,” MFIN chief executive and director Alok Misra said.
Heineken has announced a substantial investment exceeding £44 million into hundreds of its pubs across the UK, a move expected to create approximately 850 jobs.
The Dutch brewing giant’s Star Pubs operation, which manages 2,350 sites nationwide, is undertaking this significant financial commitment despite a challenging period for the pub sector.
The industry has faced considerable pressure over the past year, grappling with escalating labour costs and increases in national insurance contributions.
Concurrently, consumer spending has been constrained by concerns over inflation and rising unemployment, further impacting pub revenues. However, pubs did receive additional business rates support from the government last month, aimed at alleviating some of these financial burdens.
Lawson Mountstevens, managing director of Star Pubs, indicated that the investment strategy is partly designed to bolster revenues and help the group navigate the recent “sustained increases in running costs”.
This year, £44.5 million will be allocated to upgrades for 647 pubs. A notable 108 of these venues are earmarked for particularly significant cash injections, with each transformation costing at least £145,000.
Heineken clarified that while the majority of its pubs are group-owned, they are independently operated by local licensees. A key focus for this investment, particularly in the lead-up to the 2026 football World Cup, will be on sports-focused venues.
The pub firm and brewer has a history of significant investment in British pubs, having pumped £328 million into the sector since 2018. Work has already commenced at 52 locations, including eight projects dedicated to reopening boarded-up pubs that have endured lengthy closures.
Mr Mountstevens also urged the government to reduce the tax burden on pubs, arguing it would ease cost pressures and foster further job creation within the industry.
He stated: “We can only do so much; the root-and-branch reform of business rates that the industry has been calling for over many years is urgently required, as well as a lowering of the burden of taxation on pubs, including VAT and beer duty.”
He concluded with a direct appeal: “We are calling on the Government to support us in bringing out the best in the Great British pub.”
GameStop’s boss Ryan Cohen says he sees potential to make eBay a much bigger rival to Amazon.
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It comes as the US said on Monday it will begin to help “guide” vessels out of the Strait of Hormuz.
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