New Delhi, May 9 (H.S.): The Central Government has expanded the loan guarantee scheme to enhance capital access for startups. The government has issued a notification doubling the guarantee limit in the Credit Guarantee Scheme for Startups (CGSS). Under this scheme, banks and other financial institutions are being encouraged to provide loans to startups.
The Ministry of Commerce and Industry stated in a statement released on Friday that the Department for Promotion of Industry and Internal Trade (DPIIT) has notified the expansion of the CGSS, under which the maximum guarantee cover limit per borrower has been increased from ₹10 crore to ₹20 crore. Additionally, the guarantee cover limit for loan amounts up to ₹10 crore has been increased to 85% of the default amount, while for loan amounts exceeding ₹10 crore, the guarantee cover for the default amount has been set at 75%. This expansion of the scheme aligns with the announcement made in the Union Budget 2025-26.
The Credit Guarantee Scheme for Startups (CGSS) was notified on October 6, 2022, as part of the broader vision of the Startup India initiative launched by Prime Minister Narendra Modi on January 16, 2016. This scheme is designed to facilitate collateral-free loan financing through instruments such as working capital, term loans, and venture loans.
Hindusthan Samachar / Jun Sarkar
