National Credit Guarantee Trustee Company
Also called: NCGTC · Topic: Rural Credit, Microfinance and Financial Inclusion · NCERT: Beyond NCERT
Meaning
The National Credit Guarantee Trustee Company (NCGTC) is a trustee company set up by the Union government. A trustee company manages funds on behalf of others. NCGTC runs several credit guarantee funds. A credit guarantee is a promise to repay the lender if a borrower fails to repay. Through these funds, NCGTC gives guarantee cover to Lending Institutions (LIs), such as banks, on collateral-free loans. Collateral is an asset a borrower pledges as security. Many poor borrowers have none, so the guarantee lets banks lend to them without it.
Example
NCGTC delivers cover under the Credit Guarantee Fund for Micro Units (CGFMU), which was launched in January 2016. The fund covers PMMY (Mudra) loans of up to ₹20 lakh and PMJDY overdrafts of up to ₹10,000. In 2026 the Cabinet continued the fund up to 31.03.2031, approved a corpus of ₹5,000 crore, and cut the general guarantee fee from 1% to 0.75% a year.
Don't confuse with
- CGFMU: this is one of the funds. NCGTC is the trustee company that manages it and passes its cover to lenders.
- CGTMSE: this is a separate guarantee trust, set up in 2000, for loans to micro and small enterprises. Mudra loans are covered through CGFMU, not CGTMSE.