(Article) Credit Risk Guarantee Fund (CGFS)

(Notes Useful in all Interviews conducted by UPSC; Civil Services (Exclusive): GS (CS Pre, CS Mains- National Affairs, Social Issues, Indian Economy) & in optionals like Public Administration, Sociology, Geography, Political Science, Law etc)

Rationale:

To address the issue of credit enablement of EWS and LIG households, the Housing & Urban Poverty Alleviation (HUPA) Ministry proposes to create a Credit Risk Guarantee Fund Scheme (CGFS) under Rajiv Awas Yojana.

Salient Features of the Proposed Fund

Under the Credit Guarantee Fund Scheme (CGFS) the Government of India will provide credit guarantee support to collateral-free / third-party-guarantee-free housing loans up to Rs. 5 lakh extended by lending institutions for Low Income Housing.— WHO’s Concept of Healthy City

The CGFS will cover the housing loans to EWS/ LIG borrowers for the purposes of repairs, home improvement, construction, acquisition, and purchase of new or second hand dwelling units, involving an amount not exceeding Rs. 5 lakh per loan. —Inclusive Growth

The guarantee cover available under the scheme is proposed to be to the extent of 90% of the sanctioned housing loan amount for a loan amount of upto Rs.2 lakh. And 85% for loan amounts above Rs.2 lakh and upto Rs. 5 lakh. —Targeting Beneficiaries, Justice Should Reach the Poor

To administer and oversee the operations of the Scheme, provision has been made for establishment of a Credit Risk Guarantee Fund Trust for low income housing (CGFT). —New Body

Rs.1000 crores has been earmarked as an initial Corpus for CGFS. —Corpus Amount

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