Credit Guarantee Scheme for Startups gets notified by DPIIT
The establishment of Credit Guarantee Scheme for Startups (CGSS) that’s meant  for providing credit guarantees to loans provided bythe Scheduled Commercial Banks as well as Non-Banking Financial Companies (NBFCs) and Alternative Investment Funds (AIFs) registered at Securities and Exchange Board of India (SEBI), has been notified by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.
To finance the eligible borrowers for example the Startups, the CGSS is targeted to provide credit guarantee to a particular limit on the loans provided to the startups. The credit guarantee cover is umbrella based and transaction based.
The scheme will be operated by the National Credit Guarantee Trustee Company Limited (NCGTC). Launched by Prime Minister, Narendra Modi in 2016, the Startup India Action Plan has been aimed to lay the foundation of Government support, incentives and schemes to create a vibrant startup ecosystem.
Under this scheme, DPIIT recognised startups will be provided a dedicated credit guarantee and it will address the issue of non-availability of collateral free loan. It will also enable the flow of financial support to the innovative startups.
