Ministry of Commerce and Industry vide press release dated July 26, 2017 has intimated the process of formulating a Credit Guarantee Scheme for Startups (“CGSS”) with a corpus contribution of INR 2000 crores, that will enable Startups to raise loans without any collateral for their business purposes. The proposed scheme will provide credit guarantee upto INR 500 lakhs per case, inclusive of term loan, working capital, or any other instrument of assistance extended by Member Lending Institutions (“MLIs”) to finance an eligible borrower i.e. a Startup recognized by Department of Industrial Policy and Promotion (“DIPP”).
The main norms and preconditions of the CGSS are as follows:
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