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

CGSS does not provide guarantee cover to DPIIT recognized directly, but through Trustee (NCGTC) which in turn provides guarantee cover to MIs who provide loans to startups. The instruments of assistance would be in the form of Venture debt, working capital, subordinated debt/mezzanine debt, debentures, Optionally Convertible debt and other fund based as well as non-fund-based facility which has crystallized as a debt obligation. Credit guarantee cover under this model would be either transaction based or umbrella based.

Operational Guidelines




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

  • Startup as recognized 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:

  • Scheduled Commercial Banks and Financial Institutions,
  • 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.

Registration Process


All eligible institutions may register itself under the said scheme by submitting a signed undertaking (format given on website) and Board Resolution. Upon successful registration of the Member Institution (MI), login credentials of the MI shall be created whereafter it can apply for guarantee cover on NCGTC’s portal. To know more and register as an MI, visit the NCGTC's portal. 

A startup needs to be recognized by DPIIT for it to be able to avail the benefits under the scheme. The Scheme by way of providing guarantee cover, supports eligible Banks, NBFCs and AIFs to lend to DPIIT recognised eligible startups. Eligible startups may approach these institutions for funding requirement, who would evaluate the same in accordance with general lending protocols and scheme and other guidelines.


Frequently Asked Questions

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

The broad objective of CGSS is to provide guarantee upto a specified limit against credit instruments extended by MIs to finance eligible startups. This Scheme would help provide the much-needed collateral free debt funding to startups. In this regard, an eligible startup shall approach an MI and seek credit assistance under this guarantee scheme.

The MI shall examine the feasibility and viability of the project from various aspects and after ensuring feasibility and viability of the project and compliance with eligibility parameters of the scheme guidelines, sanction need based assistance to the startup as per its guidelines. Simultaneously, the MI shall apply on the portal of NCGTC and seek guarantee cover for the credit extended. Issue of guarantee cover under CGSS shall be automatic based on meeting of eligibility parameters, which has to be ensured by the MI.

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 maximum of Rs.10 crore per borrower:

  • to the extent of 80% of the amount in default, if the original loan sanction amount is upto 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 upto 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 upto 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 aggregate of principal investments of written-off assets, along with three months accrued interest from the date of default. In case of partially written off assets, only the principal portion written-off along with three months accrued interest thereon form the date of default will be accounted for the loss assets.

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