Startup Credit Guarantee Scheme: DPIIT Notifies Startup Credit Guarantee Scheme, Seeking Ease of Doing Business Suggestions

The Department for the Promotion of Industry and Internal Trade (DPIIT) has notified a credit guarantee system for startups for granting collateral-free loans. According to the notification, loan/debt facilities provided to an eligible borrower on or after October 6 would be eligible for program coverage.

“The central government has approved the ‘Credit Guarantee Scheme for Startups (CGSS) for the purpose of providing credit guarantees for loans made by member institutions (MIs) to finance eligible borrowers who are startups,'” said said the DPIIT.

MIs include financial intermediaries (banks, financial institutions, NBFCs, AIFs) engaged in loans/investments and complying with the approved eligibility criteria under the program.

He said the maximum collateral coverage per borrower should not exceed Rs 10 crore and the credit facility covered here should not have been covered by any other collateral scheme.

The government will establish a trust or fund to guarantee payment in the event of default on loans or debts granted to eligible borrowers, managed by the Board of Directors of National Credit Guarantee Trustee Company Ltd as Trustee of the Fund. The department will establish a management committee to oversee the affairs of the trust.

The ease of doing business

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The DPIIT on Friday invited businesses and citizens to share their suggestions on matters of starting and running a business and decriminalizing petty offenses under different provisions/sections.

“The aim is to make ‘New India’ a preferred investment destination across the globe and ensure hassle-free service delivery to the end beneficiary,” he said in a statement.

Major areas include obtaining permissions and approvals, renewing certificates and licenses, decriminalizing minor infractions, and demand and payment incentives. Filings/declarations, inspections/audits, online systems/processes, maintenance of books and records, and procedural/guideline issues are the other topics.

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