अभारभिउ

The Government of India established the Credit Guarantee Scheme for Startups with a fixed corpus for providing credit guarantees to loans extended to DPIIT recognised startups by Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs) and Venture Debt Funds (VDFs) under SEBI registered Alternative Investment Funds.

 

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Operational Guidelines

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आरजाथाव गुन

Borrower

The eligibility criteria for an entity to borrow under the Credit Guarantee Scheme for Startups shall be as follows, wherein an entity should be:

  • Startups as recognised by DPIIT as per Gazette Notifications issued from time to time, and
  • Startups that have reached stage of stable revenue stream, as assessed from audited monthly statements over a 12 month period, amenable to debt financing, and
  • Startup not in default to any lending/investing institution and not classified as Non-Performing Asset as per RBI guidelines, and
  • Startup whose eligibility is certified by the member institution for the purpose of guarantee cover
Lending/Investing Institutions

The eligibility criteria for the lending/investing institutions under the Credit Guarantee Scheme for Startups shall be as follows:

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  • RBI registered Non-Banking Financial Companies (NBFCs) having a rating of BBB and above as rated by external credit rating agencies accredited by RBI and having minimum networth of Rs. 100 crore. However, it may be noted that in case an NBFC subsequently becomes ineligible, due to a downgrade in the credit rating below BBB, the NBFC shall not be eligible for further guarantee cover till upgradation again to eligible category.
  • SEBI registered Alternative Investment Funds (AIFs).

Registered Member Institutions

As on September 12, 2023, there are a total of 25 registered Member Institutions (MIs). Out of this, 11 are Public Sector Banks, 7 are Private Sector Banks, 1 Foreign Bank, 1 Small Finance Bank, 1 AIF, 1 Financial Institution, and 3 NBFCs.

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Registration Process

 

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Frequently Asked Questions

1 What is the objective of CGSS and how would guarantee be issued?

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2 What is the quantum of assistance eligible for guarantee cover under the Scheme?

The maximum amount of debt (fund based or non-fund based facilities) eligible for guarantee cover under the scheme is Rs. 10 crore per borrower, irrespective of the amount of debt facilities extended to the borrower by MI(s). The debt facilities available for guarantee cover would be net of the value of collateral, i.e., if the total debt facilities to a borrower X is Rs.15 crore against which it has provided collateral (valued highest by the MI at Rs. 8 crore)

3 What is the extent of the guarantee cover under CGSS ?

Credit guarantee cover under this scheme would be either transaction based or umbrella based:

a) For transaction-based guarantee cover (for Banks/FIs/NBFCs) As per details given below, subject to a maximum of Rs. 10 crores per borrower:

  • To the extent of 80% of the amount in default, if the original loan sanction amount is up to Rs. 3 crore.
  • To the extent of 75% of the amount in default, if the original loan sanction amount is above Rs. 3 crore and up to Rs 5 crore.
  • To the extent of 65% of the amount in default if the original loan sanction amount is above Rs. 5 crore.

b) For umbrella-based guarantee cover (for SEBI-registered AIFs) Guarantee cover shall be of actual losses or up to a maximum of 5% of Pooled Investment on which cover is being taken from the fund in Startups, whichever is lower, subject to a maximum of Rs. 10 crore per borrower (net of collateral, if any). Losses are defined as the aggregate of principal investments in written-off assets, along with three months of accrued interest from the date of default. In the case of partially written-off assets, only the principal portion written-off along with three months of accrued interest thereon from the date of default will be accounted for the loss assets.


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