Credit Guarantee Scheme for Startups (CGSS)

About:

• CGSS is aimed at providing credit guarantee up to a specified limit against loans extended by Member Institutions (MIs) to finance eligible borrowers viz. Startups. This scheme would help provide collateral-free debt funding to startups
• The credit guarantee cover under the Scheme would be transaction-based and umbrella based.
  • In transaction-based guarantee cover, the guarantee cover is obtained by the MIs on single eligible borrower basis. It will promote lending by Banks/ NBFCs to eligible startups.
  • The umbrella-based guarantee cover will provide guarantee to Venture Debt Funds (VDF) registered under AIF regulations of SEBI.
• The exposure to individual cases would be capped at Rs. 10 crore per case or the actual outstanding credit amount, whichever is less.
• DPIIT will be constituting a Management Committee (MC) and a Risk Evaluation Committee (REC) for reviewing, supervising and operational oversight of the Scheme.
• The National Credit Guarantee Trustee Company Limited (NCGTC) will be operating the Scheme.

Source : Times of India