Govt to provide collateral-free loans to start-ups under CGSS framework

The credit guarantee cover under the scheme would be both transaction-based (for single eligible borrowers) and umbrella-based (for a group of eligible borrowers)

The Department for Promotion of Industry and Internal Trade (DPIIT) on Friday notified the establishment of the Credit Guarantee Scheme for Start-ups (CGSS). It would provide collateral-free debt funding up to Rs 10 crore for start-ups extended by commercial banks, non-banking financial companies (NBFCs) and Securities and Exchange Board of India (Sebi)-registered alternative investment funds (AIFs).

The scheme, earlier envisaged as part of the Start-up India Action Plan, was proposed to have a corpus of Rs 2,000 crore. However, the latest notification doesn’t mention the corpus amount.

The credit guarantee cover under the scheme would be both transaction-based (for single