In a major push to empower India’s startup ecosystem, the government has expanded the Credit Guarantee Scheme for Startups (CGSS), doubling the credit guarantee limit from ₹10 crore to ₹20 crore per borrower. This move comes as a relief during a time of funding slowdown in the private sector.
Key Highlights:
✅ Credit guarantee per startup raised to ₹20 crore
✅ 85% guarantee on loans up to ₹10 crore, 75% beyond that
✅ Guarantee fee halved from 2% to 1% annually for 27 priority sectors under Make in India
Union Minister Piyush Goyal said the decision would boost startup growth and promote domestic manufacturing and innovation across critical sectors like electronics, clean energy, food processing, defence, and more.
Why it matters:
🔹 Startups often face funding hurdles due to lack of collateral
🔹 Enhanced guarantee coverage makes it easier to secure working capital, term loans, and venture debt
🔹 Lower fees make formal credit more attractive than equity-based funding
This revision aligns with India’s broader strategy to deepen the startup debt ecosystem while strengthening MSME resilience. DPIIT confirmed that operational bottlenecks have also been addressed in the new scheme design, making it more accessible for both borrowers and lenders.
💡 With 1.57 lakh+ startups recognized and 15.5 lakh jobs created since 2016, this move could unlock the next phase of India’s innovation-led growth.
