If you are planning to start your own business whether in the form of a startup or a small business. On the same page you feel that you do not have adequate funding to run your business. This is a major problem which many entrepreneurs face. The government of India comes with some schemes in which they provide financial assistance to entrepreneurs.
The Department for Promotion of Industry and Internal Trade (DPIIT) has announced a scheme called the credit guarantee scheme for startups or CGSS. The government of India has notified the scheme and said that the loan facility will be sanctioned to an eligible borrower after the 6th of October 2022.
Aim of the scheme
The main objective of the credit guarantee scheme for start-ups is to provide them with collateral-free loans up to a specified limit. The CGSS is also aimed at providing credit guarantees up to a specified limit against loans that can be extended by Member Institutions (MIs) to finance eligible borrowers.
MIs are financial intermediaries such as all banks, financial institutions, NBFCs (Non-Banking Financial Companies), and AIFs that are engaged in lending or investing. These bodies conform to the eligibility criteria and are approved under the scheme.
Benefits of the schemes
Firstly, you should be eligible to avail yourself of the benefits of the scheme. The eligible criteria are mentioned below.
It is also mentioned that there will be a Management Committee constituted by the DPIIT to overlook the affairs of the trust.
The committee will be responsible for reviewing, supervising, and monitoring the' functioning of the trust and shall provide necessary guidance to the trust on broad policy matters related to the scheme, As the ministry said about the scheme.