HomeBusinessGovernment notifies credit guarantee scheme for startups

Government notifies credit guarantee scheme for startups

New Delhi: The government has notified a credit guarantee scheme for startups to provide collateral-free loans up to a specified limit.

In a notification, the Department for Promotion of Industry and Internal Trade (DPIIT) said that loans/credit facilities sanctioned to the eligible borrower on or after October 6 will be eligible for coverage under the scheme.

“The Central Government has approved the ‘Credit Guarantee Scheme for Startups’ (CGSS) with the objective of providing credit guarantee for loans given by Member Institutions (MIs) to finance eligible borrowers for startups,” it said. .

The scheme will help startups to provide necessary collateral-free loan funds.

MI includes financial intermediaries (Banks, Financial Institutions, NBFCs, AIFs) who are eligible for lending/investing and as per the approved eligibility criteria under the scheme.

Accredited startups that have reached a stage of stable revenue streams, as assessed from audited monthly statements over a 12-month period, that are liable for debt financing; and Startups which are not defaulters to any lending/investing institution and are not classified as Non-Performing Asset as per RBI guidelines are eligible to avail this scheme.

“The maximum guarantee cover per borrower shall not exceed Rs 10 crore. The credit facility being covered here should not be covered under any other guarantee scheme,” the department said.

For the purpose of this scheme, a trust or fund shall be set up by the Government of India, with the object of guaranteeing payment against loan or default in loans granted to eligible borrowers, which shall be managed by the Board of the National Credit Guarantee Trustee Company Limited. is done. Trustee of the Fund.

It also stated that the lending institutions shall evaluate credit applications using prudent banking judgment and exercise their professional discretion/due diligence in selecting commercially viable offers and operating the borrowers’ accounts with normal banking discretion. will have to use.

These institutions will also have to keep a close watch on the borrower’s account.

In addition, there will be a Management Committee constituted by DPIIT to oversee the affairs of the Trust.

The committee will be responsible for reviewing, supervising and monitoring the functioning of the Trust and will provide necessary guidance to the Trust on broad policy matters relating to the scheme.

Hello Friends, My Name is Raushan Kumar. I am a Part-Time Blogger and Student. I am author of https://searchnews.in . We're dedicated to providing you the best of News, with a focus on Business, Health, Lifestyle, World, Tech, India, Gadget.


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