Govt to provide collateral-free loans to start-ups under CGSS framework
- IBEF
- October 10, 2022
The Department for Promotion of Industry and Internal Trade (DPIIT) announced the creation of the Credit Guarantee Scheme (CGSS) for Start-ups. It will provide collateral-free loan finance of up to Rs. 10 crore (US$ 1.21 million) for start-ups extended by commercial banks, non-banking financial firms (NBFCs), and alternative investment funds (AIFs) registered with the Securities and Exchange Board of India (Sebi).
The scheme's credit guarantee coverage would be transaction-based (for single qualifying borrowers) as well as umbrella-based (for a group of eligible borrowers). The CGSS is expected to supplement the existing Start-up India initiatives. These include the Start-up India Seed Fund Scheme (SISFS), which aims to raise domestic financing for Indian start-ups. In 2016, the government established the fund of funds for start-ups with a corpus of Rs. 10,000 crore (US$ 1.21 billion) to boost capital availability and catalyse private investment in start-ups.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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