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Indian Government announces Credit guarantee scheme for Start-ups

Loans sanctioned on or after October 6 would be eligible for coverage under the scheme.

Indian Government credit guarantee scheme for start-ups, The Department for Promotion of Industry and Internal Trade (DPIIT) has announced a credit guarantee scheme for start-ups. The scheme will provide collateral-free loans up to a specified limit to eligible borrowers. Loan/debt facilities sanctioned on or after October 6 will be eligible for coverage under the scheme.

This scheme will help provide collateral-free debt funding to start-ups, which will be a great boost for many young businesses. The scheme will be administered by financial intermediaries such as banks, financial institutions, NBFCs and AIFs.

Under the scheme, recognized start-ups that have reached the stage of stable revenue stream, as assessed from audited monthly statements over a 12 month period, amenable to debt financing; and start-ups that are not in default to any lending/investing institution and not classified as non-performing asset as per RBI guidelines, are eligible to avail benefits of this scheme. The scheme is aimed at providing easy access to debt financing for start-ups, and is expected to boost the start-up ecosystem in the country.

According to the notification, the maximum guarantee cover per borrower shall not exceed ₹10 crore. The credit facility being covered here should not have been covered under any other guarantee scheme. The scheme is managed by the Board of National Credit Guarantee Trustee Company Ltd as the Trustee of the Fund.


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