Close Menu
Own News WireOwn News Wire
    What's Hot

    FTC hits pause on click to cancel rule

    Expedia First-Quarter Bookings Miss as Travel Demand Softens

    Coinbase Considered, Decided Against Michael Saylor’s Bitcoin Buying Strategy

    Facebook X (Twitter) Instagram
    Own News WireOwn News Wire
    • Home
    • About
    • Contact
    • Privacy Policy
    • Terms and Conditions
    • Disclaimer
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Sports
    • Technology
    • Education
    • Money
    • Companies
    • Entertainment
    Subscribe
    Own News WireOwn News Wire
    You are at:Home » Govt doubles credit guarantee for startups, cuts fees for key sectors
    Companies

    Govt doubles credit guarantee for startups, cuts fees for key sectors

    ONS EditorBy ONS EditorMay 9, 2025No Comments3 Mins Read0 Views
    Facebook Twitter Pinterest Telegram LinkedIn Tumblr Email Reddit
    Share
    Facebook Twitter LinkedIn Pinterest WhatsApp Email


    New Delhi: To ease credit access for startups and fuel innovation in priority sectors, the government has doubled the guarantee cover under its Credit Guarantee Scheme for Startups (CGSS), raising the limit per borrower from ₹10 crore to ₹20 crore. 

    The move comes amid tightening funding conditions, with startups calling for stronger institutional support as private capital flows dry up.

    The revised scheme, notified by the Department for Promotion of Industry and Internal Trade (DPIIT) on Friday, also increases the extent of guarantee cover to 85% for loans up to ₹10 crore and 75% for loans above that threshold. The government is positioning the expanded coverage as a way for startups to secure working capital, term loans, and venture debt, key to sustaining R&D and product development.

    “With increased collateral-free credit support and enhanced guarantee cover, this move is set to boost startup growth. Additionally, to foster domestic manufacturing and Aatmanirbharta, 27 champion sectors under Make in India will benefit from a reduced annual guarantee fee,” Piyush Goyal, union minister for commerce and industry, said in a post on X.

    The Annual Guarantee Fee (AGF) for startups in 27 identified champion sectors has been slashed from 2% to 1% per annum. These sectors, identified under the ‘Make in India’ initiative, include advanced manufacturing, electronics, defence, food processing, and clean energy.

    “The reduced guarantee fee and expanded cover will make formal credit more accessible and attractive for startups, especially those innovating in critical sectors. This will not only reduce dependence on equity capital but also deepen the debt ecosystem,” said Sanjiv Singh, joint secretary, DPIIT, told Mint.

    The CGSS expansion follows consultations with startup stakeholders and was part of the Union Budget announcements for FY26. The government expects the changes to encourage more banks and financial institutions to lend to early-stage ventures, which often struggle to secure funding due to their high-risk profiles.

    Launched in 2022, CGSS aims to tackle the collateral bottleneck faced by startups by offering credit guarantees against loans sanctioned by banks, financial institutions, non-banking financial companies (NBFCs), and alternative investment funds registered with the Securities and Exchange Board of India (Sebi). 

    The latest revision aligns with a broader policy shift to strengthen the startup sector as global macroeconomic uncertainties tighten private capital flows.

    For many young firms in deep-tech, hardware, and industrial innovation, accessing timely credit remains a challenge despite promising business models. The DPIIT said the scheme has been tweaked to address operational bottlenecks and make it more accessible for both borrowers and lenders.

    Industry experts see the expanded coverage as a timely intervention for India’s MSME sector.

    “The revisions to CGSS…will help spur further lending to sectors that are of critical importance for India, particularly in manufacturing. Crucially, it will boost MSME lending at a time when credit demand…is expected to rise in light of global tariff uncertainties,” said Utkarsh Sinha, managing director, Bexley Advisors, a boutique investment bank.

    Amit Sachdev, co-founder and COO of M1xchange, a Reserve Bank of India-approved TReDS platform, said the scheme will enhance lender confidence and encourage financial institutions to support MSMEs through avenues like supply chain financing, working capital loans, and bill discounting. 

    “These measures will not only bolster MSME competitiveness but also catalyse the ‘Make in India’ initiative, positioning India as a formidable player in the global manufacturing and supply chain landscape,” Sachdev said.

    As of 30 2024, the DPIIT has recognized 140,803 entities as startups. Since the launch of the Startup India initiative in 2016, these startups have generated over 1.55 million direct jobs, according to a government statement.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Reddit WhatsApp Telegram Email
    Previous ArticleSamsung Galaxy S25 Edge launch: How to watch the live stream and what to expect
    Next Article GTA 6 PC release timeline: What history tells us about Rockstar’s strategy
    ONS Editor

    Related Posts

    FTC hits pause on click to cancel rule

    May 9, 2025

    Expedia First-Quarter Bookings Miss as Travel Demand Softens

    May 9, 2025

    Coinbase Considered, Decided Against Michael Saylor’s Bitcoin Buying Strategy

    May 9, 2025

    Comments are closed.

    Editors Picks
    Latest Posts

    Subscribe to Updates

    Get the latest sports news from SportsSite about soccer, football and tennis.

    Your source for the serious news. This demo is crafted specifically to exhibit the use of the theme as a news site. Visit our main page for more demos.

    We're social. Connect with us:

    Subscribe to Updates

    Get the latest creative news from FooBar about art, design and business.

    © 2025 ThemeSphere. Designed by ThemeSphere.
    • Home
    • About
    • Contact
    • Privacy Policy
    • Terms and Conditions
    • Disclaimer

    Type above and press Enter to search. Press Esc to cancel.

    Go to mobile version