Credit Guarantee Scheme for Startups (CGSS)

What you get

• Guarantee cover on loans up to ₹20 crore per borrower
• Transaction-based cover: 85% of the amount in default for loans up to ₹10 crore; 75% for loans above ₹10 crore
• Umbrella-based cover (for venture debt funds): actual losses or up to 5% of pooled investment, whichever is lower
• Eligible instruments include venture debt, working capital, subordinated/mezzanine debt, debentures and optionally convertible debt

Eligibility

• DPIIT-recognised startup
• Not in default to any lender or investor, and not classified as an NPA under RBI guidelines
• Your eligibility is certified by the member institution (MI)
• Lenders must be scheduled commercial banks, NBFCs rated BBB or above with net worth of at least ₹100 crore, or SEBI-registered AIFs

How the credit guarantee scheme for startups works

Credit types and validity

• Guarantee cover on loans up to ₹20 crore per borrower
• Transaction-based cover: 85% of default amount for loans up to ₹10 crore, 75% above ₹10 crore
• Umbrella-based cover for venture debt funds: actual losses or up to 5% of pooled investment, whichever is lower
• Covers venture debt, working capital, subordinated/mezzanine debt, debentures, optionally convertible debt

How the credits are applied and when they expire

There is no cash or credit to you from the scheme. You apply for a loan from a member institution; the lender appraises and sanctions it under its normal rules, then applies to NCGTC for guarantee cover, which is automatic once scheme criteria are met. The guarantee protects the lender if you default.

For founders in India

Indian government scheme for DPIIT-recognised startups. Eligible lenders are scheduled commercial banks, NBFCs rated BBB or above with net worth of at least ₹100 crore, and SEBI-registered AIFs. Apply on the Jan Samarth Portal or through lenders such as Axis Bank, Bank of Baroda or HDFC Bank.

How to apply, step by step

1. Get DPIIT recognition if you don't have it
2. Apply online on the Jan Samarth Portal (it lists member institutions), or apply through a member's CGSS page (e.g. Axis Bank, Bank of Baroda, HDFC Bank)
3. Or visit the nearest branch of any member institution and ask for a CGSS loan
4. The lender appraises your loan, sanctions it and applies to NCGTC for guarantee cover; cover is automatic once the scheme criteria are met

Documents and details to keep ready

• DPIIT recognition certificate
• Other documents follow the lender's normal lending requirements (not published on the scheme page)

Common reasons applications are declined

• In default to any lender or investor
• Classified as an NPA under RBI guidelines
• Not DPIIT-recognised

Tips before you apply

• Get DPIIT recognition first; it's the core eligibility rule
• Clear any defaults; NPA-classified borrowers are excluded
• Use the Jan Samarth Portal to see member institutions and apply online
• Expect normal credit appraisal; the guarantee doesn't replace the lender's checks

Terms to know

• The guarantee covers the lender; startups do not apply to NCGTC directly
• Loans are assessed under each lender's normal lending rules