Credit Guarantee Scheme for Startups (CGSS) in the offing
DSIJ Intelligence / 27 Jul 2017
The proposed scheme will provide credit guarantee up to Rs 5 crore per case inclusive of term loan, working capital or any other instrument of assistance extended by Member Lending Institutions (MLIs) to finance an eligible borrower
To be set up with a corpus of Rs 2,000 crore, the government is charting out a Credit Guarantee Scheme for Startups (CGSS) that will enable startups to raise loans without any collateral for their business purposes, announced Commerce and Industry Minister Nirmala Sitharaman.
The proposed scheme will provide credit guarantee up to Rs 5 crore per case inclusive of term loan, working capital or any other instrument of assistance extended by Member Lending Institutions (MLIs) to finance an eligible borrower i.e. a startup recognised by the Department of Industrial Policy and Promotion (DIPP).
Some of the main norms and preconditions of the CGSS includes providing benefit to a startup recognised by DIPP as per gazette notifications issued from time to time.
The minister also informed that the scheme will function under the trusteeship management of the National Credit Guarantee Trustee Company (NCGTC).
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