{"id":9706,"date":"2025-05-11T10:15:59","date_gmt":"2025-05-11T04:45:59","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=9706"},"modified":"2025-05-27T12:20:21","modified_gmt":"2025-05-27T06:50:21","slug":"credit-guarantee-scheme-for-startups-cgss","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/credit-guarantee-scheme-for-startups-cgss\/","title":{"rendered":"Credit Guarantee Scheme for Startups (CGSS)"},"content":{"rendered":"<h2>Credit Guarantee Scheme for Startups Latest News<\/h2>\n<p>The Centre recently notified an expansion of the Credit Guarantee Scheme for Startups (CGSS).<\/p>\n<h2>About Credit Guarantee Scheme for Startups<\/h2>\n<ul>\n<li>The Government of India established the CGSS in 2022 for\u00a0<strong>providing credit guarantees to loans extended by Scheduled Commercial Banks,\u00a0<\/strong>Non-Banking Financial Companies (<strong>NBFCs<\/strong>), and Securities and Exchange Board of India\u00a0<strong>(SEBI)-registered Alternative Investment Funds (AIFs).\u00a0<\/strong><\/li>\n<li>CGSS is aimed at providing credit guarantees up to a specified limit\u00a0<strong>against loans extended by Member Institutions (MIs) to finance eligible borrowers, viz., Startups\u00a0<\/strong>as defined in the Gazette Notification issued by Department for Promotion of Industry and Internal Trade (DPIIT) and amended from time to time.\u00a0<\/li>\n<li>The\u00a0<strong>National Credit Guarantee Trustee Company Limited (NCGTC)\u00a0<\/strong>is the\u00a0<strong>implementing agency<\/strong>\u00a0of the Scheme.<\/li>\n<li>CGSS does not provide guarantee cover to DPIIT-recognised startups directly, but the Trustee (<strong>NCGTC<\/strong>), which in turn\u00a0<strong>provides guarantee cover to Member Institutions (MIs) who provide loans to startups.<\/strong><\/li>\n<li>The\u00a0<strong>instruments of assistance<\/strong>\u00a0would be in the\u00a0<strong>form of venture debt, working capital, subordinated debt<\/strong>\/mezzanine debt,\u00a0<strong>debentures, optionally convertible debt\u00a0<\/strong>and other\u00a0<strong>fund-based as well as non-fund-based facilitie<\/strong>s, which have crystallised as debt obligations.\u00a0<\/li>\n<li>The\u00a0<strong>credit guarantee cover\u00a0<\/strong>under the Scheme would be\u00a0<strong>transaction-based and umbrella-based.<\/strong>\n<ul>\n<li>In transaction-based guarantee cover, the guarantee cover is obtained by the MIs on a single eligible borrower basis. It will promote lending by Banks\/ NBFCs to eligible startups.<\/li>\n<li>The umbrella-based guarantee cover will provide guarantee to Venture Debt Funds (VDF) registered under AIF regulations of SEBI.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Recent Changes:<\/strong>\n<ul>\n<li>The revised framework has\u00a0<strong>enhanced guarantee coverage,<\/strong>\u00a0increasing the maximum limit from \u20b910 crore\u00a0<strong>to \u20b920 crore per eligible borrower.<\/strong><\/li>\n<li>The\u00a0<strong>extent of guarantee<\/strong>\u00a0has also been\u00a0<strong>increased<\/strong>. F<strong>or loans up to \u20b910 crore,\u00a0<\/strong>the\u00a0<strong>guarantee will now cover 85 percent of the amount in default<\/strong>, while for loans\u00a0<strong>above \u20b910 cror<\/strong>e, the\u00a0<strong>coverage will be 75 percent.<\/strong><\/li>\n<li>Further, the Annual Guarantee Fee (AGF) for startups in 27 Champion Sectors has been reduced to 1 percent p.a. from 2 percent p.a.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Credit Guarantee Scheme for Startups FAQs<\/h2>\n<p><strong>Q1<\/strong>. What is the credit guarantee scheme for startups?<\/p>\n<p><strong>Ans<\/strong>. It is a financial support initiative launched in 2022 with the goal of improving access to collateral-free loans for DPIIT-recognized startups.<\/p>\n<p><strong>Q2<\/strong>. Which organization is responsible for implementing the CGSS?<\/p>\n<p><strong>Ans<\/strong>. National Credit Guarantee Trustee Company Ltd. (NCGTC)<\/p>\n<p><strong>Q3<\/strong>. What is the percentage of guarantee cover for loans up to \u20b910 crore under CGSS?<\/p>\n<p><strong>Ans<\/strong>. 85%<\/p>\n<p><strong>Source<\/strong>:\u00a0<a href=\"https:\/\/ddnews.gov.in\/en\/centre-expands-credit-guarantee-scheme-for-startups\/\" target=\"_blank\" rel=\"nofollow noopener\">DDN<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Credit Guarantee Scheme for Startups offers credit guarantees for loans given to DPIIT-recognized startups by banks, NBFCs, and financial intermediaries.<\/p>\n","protected":false},"author":5,"featured_media":47448,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[437,21,23],"class_list":{"0":"post-9706","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-credit-guarantee-scheme-for-startups-cgss","9":"tag-prelims-pointers","10":"tag-upsc-prelims-current-affairs","11":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/9706","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=9706"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/9706\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/47448"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=9706"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=9706"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=9706"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}