Credit Guarantee Scheme for Startups


Under the Startup India initiative, Government of India has taken a step further to ease up the fund crisis faced by start-ups with credit guarantee scheme. The commerce and industry ministry Nirmala Sitharaman has proposed INR 2,000 Cr for this scheme.

The scheme will provide credit guarantee of INR 49.5 Cr per case, inclusive of the term loan, working capital or for any other instrument of assistance. Any eligible startup that is recognized by DIPP can avail this from any finance lending institutions.

In early June 17, it was reported that minister is looking for setting up to Startup Coast in Karnataka to encourage entrepreneurs. The Startup Coast is supposed to have two innovation centers and up to 5 incubation hubs in colleges. There are also plans of having 100 seater workspace in Mangaluru.  The project also has plans to have 20 to 30 laboratories in schools across the region.

As part of the Startup India initiative, central and state governments are offering perks including $1.5 Bn “Fund of Funds” scheme, tax exemptions and the inclusion of foreign investment. The sad part here is to date only INR 5.66 Cr of the 1. 5 Bn (INR 10,000 Cr) amount has actually been distributed. To add to the growth of the startups, the government promised to distribute INR 5 Cr as collateral free loans to the Startups in March 2017.

Minister for Commerce and Industry Nirmala Sitharaman has taken many steps to rapidly increase the growth of the Startups. In June 2017, she inaugurated the Startup India Online Hub.

From the time Startup India has been launched, Government of India has been taking proactive steps to make India take those initial steps towards becoming self-reliant irrespective of the location within India. It is a wakeup call being given to everyone who has a dream to be their own bosses to become entrepreneurs.  The Government of India is paving the way for you by setting up incubation centers, providing credit schemes and also tax benefits. It is time to take this opportunity to create a niche for yourself and also for the success of the initiative taken by the Government.

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