Govt doubles startup credit guarantee, cuts sector fee

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

- Dhirendra Kumar & Swarnali Mukherjee

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.