Banks seek microloan guarantee extension

Banks that used the microloan guarantee scheme are seeking its extension. The scheme allowed them to reduce credit risk by providing a guarantee for small loans. IDFC First Bank and small finance banks such as AU, Jana, and Suryoday were among the biggest users of this scheme, and they have set aside the guarantee fee for the current fiscal year, expecting the government to reopen the window soon. This extension is crucial for these banks as it will help them manage their risk and continue lending to small borrowers.

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Banks seek microloan guarantee extension to reduce credit risk. The scheme has been beneficial for small finance banks.

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