GOVERNMENT NOTIFIES CREDIT GUARANTEE SCHEME FOR START-UPS

THE GOVERNMENT HAS notified the credit guarantee scheme for start-ups to provide them with collateral-free loans up to a specified limit. In a notification, the Department for Promotion of Industry and Internal Trade (DPIIT) said that loan/debt facilities sanctioned to an eligible borrower on or after October 6 would be eligible for coverage under the Scheme.

"The Central Government has approved the 'Credit Guarantee Scheme for Start-ups (CGSS) to provide credit guarantees to loans extended by member institutions (MIs) to finance eligible borrowers being start-ups," it said. It added that this Scheme would help provide much-needed collateral-free debt funding to start-ups.

Start-ups that are not in default to any lending or investing institution and not classified as a non-performing asset as per RBI guidelines are also eligible to avail benefits of this Scheme.

The committee will be responsible for reviewing, supervising and monitoring the functioning of the trust. It shall provide necessary guidance to the Trust on broad policy matters related to the Scheme. – 

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