Yes, Zerodha provides margins on liquid mutual funds when you pledge them as collateral. Cash equivalent securities have a low-risk, low-return profile that includes items that are similar to cash, and liquid funds are cash equivalent securities due to their nature. You can find the list of approved instruments that can be pledged for margins and the applicable haircut percentage by visiting zerodha.com/approved-securities.
You can view the collateral margin for liquid bees ETFs or liquid mutual funds you have pledged under the Collateral (liquid funds) section of Funds on Kite.