CREDIT WIDENING

CREDIT WIDENING
• Definition
Increasing the number of credit accounts in favour of low income
and other disadvantaged sections of the society.

CREDIT WIDENING:
• Credit widening promote financial inclusion in our country.
• Credit facility is widened to the Nook and corners of the country
through commercial banking, cooperative societies and other
banking sectors.
• This banks provide variety of credit facilities such as long term,
medium term and short term loans.

PROMOTING CREDITS THROUGH
INNOVATIVE POLICIES:
• Prandhan mandri jan dhan yojana ( PMJDY)
• Stand up India scheme
• Credit guarantee scheme for start ups.
• And so many schemes are implemented.

PMJDY :
• Pradhan Mantri Jan Dhan Yojana is a National Mission on Financial Inclusion which
has an integrated approach to bring about comprehensive financial inclusion and
provide banking services to all households in the country.
• The scheme ensures access to a range of financial services like availability of basic
savings bank account, access to need based credit, remittances facility, insurance and
pension.

STAND UP INDIA SCHEME:
• The objective of the Stand-Up India scheme is to facilitate bank loans
between 10 lakh and 1 Crore to at least one Scheduled Caste (SC) or
Scheduled Tribe (ST) borrower and at least one woman borrower per
bank branch for setting up a greenfield enterprise.
• This enterprise may be in manufacturing, services, agri-allied
activities or the trading sector In case of non-individual enterprises
at least 51% of the shareholding.

ELIGIBILITY FOR STAND UP INDIA
SCHEME:
• weaker section of the society and/or woman entrepreneurs, above 18
years of age.
• Loans under the scheme is available for only green field project. Green
field signifies, in this context, the first time venture of the beneficiary in
the manufacturing, services, agri-allied activities or the trading sector.
• In case of non-individual enterprises, 51% of the shareholding and
controlling stake should be held by either SC/ST and/or Women
Entrepreneur.
• Borrower should not be in default to any bank/financial institution

CREDIT GUARANTEE SCHEME
• Credit Guarantee Scheme (CGS) was launched to strengthen credit delivery system
and to facilitate flow of credit to the MSE sector, create access to finance for
unserved, under-served and underprivileged, making availability of finance
from conventional lenders to new generation entrepreneurs.
• Over the past 20 years, CGTMSE has been instrumental in providing guarantee
cover to collateral and/or third party guarantee free credit facilities extended by
eligible Member Lending Institution [MLIs] to MSEs

ADVANTAGE OF CREDIT WIDENING:
• Increasing the credit facilities to weaker section of the society.
• Increasing the ability of individuals and households to access basic
services like health , education.
• Direct impact on poverty reduction.

DISADVANTAGE OF CREDIT
WIDENING
• Extension of credit also posses some risk.
• Risk caused due to non payment by borrower.
• It makes the credit system unsustainable and potentially destability.